On 19 December, Victoria Atkins, Financial Secretary to the Treasury, announced that there will be more time to prepare for MTD for ITSA which was initially due to begin in April 2024.
Prior to yesterday’s announcement, MTD for ITSA required individuals with rental and self-employment income (not profits) totalling more than £10,000 per year to complete quarterly submissions of income and expenditure using compatible software.
There is an understanding that businesses and self-employed individuals are facing a challenging economic climate. This delay will give all businesses, self-employed individuals, and landlords within the scope of MTD for ITSA time to adapt to new ways of working.
- MTD for ITSA will now be phased in, starting in April 2026.
- April 2026 – Mandatory filing for businesses, self-employed individuals, and landlords with over £50,000 income
- April 2027 – Mandatory filing for businesses, self-employed individuals, and landlords with over £30,000 income
- The government will review the needs of smaller business, particularly those with income under £30,000
- MTD will not be extended to general partnerships in 2025 as previously announced, but will be introduced at a later date.
- New penalty system will come into effect for taxpayers when they become mandated to join MTD
We are currently reviewing all our clients’ information to see how this will impact them and we will be in contact in due course.
If you have any questions about MTD for ITSA please speak to your usual contact at Richardsons, or get in touch with Chloe Jackson.