The introduction of Making Tax Digital (MTD) for Income Tax Self-Assessment (ITSA) has been delayed to April 2024, giving businesses and landlords breathing room to prepare for the changes needed to ensure that they are compliant.
The changes now mean that businesses and landlords with income over £10,000 per annum in the tax year beginning April 2024 will have to ensure they have suitable software in place to be able to keep digital records and submit their income tax self-assessment. General partnerships will have until the tax year beginning April 2025, and the date other type of partnerships will be required to join is yet to be confirmed.
MTD for ITSA will mean businesses and landlords will be required to send a quarterly summary of their business income and expenses to HMRC using MTD compliant software, and in return they will receive an estimated tax calculation with the aim of helping users budget for their tax requirements. At the end of the year, instead of submitting a self-assessment tax return, users will instead add any non-business information and finalise their tax affairs using their MTD software.
At a time of continued pressure on business owners, the change of date will be welcomed by many who will benefit from the additional time to get their MTD software set up. As always, we recommend that you speak to your current Wenn Townsend contact, or contact Helen Smith our Private Client Tax manager, with any queries you have. For clients who will be impacted by the MTD for ITSA changes, we will continue to be in touch to ensure you are ready and have a number of solutions that we are happy to recommend.