Making Tax Digital - The Big Delay

Making Tax Digital - The Big Delay

Mar 28, 2023 12:54 PM

I call it “the nightmare” but to be honest, I, like a lot of other accountants, actually embraced Making Tax Digital for Income Tax & Self-Assessment (MTDITSA)

However, there is no denying that not having to change 90% of your clients’ MO when preparing their tax returns is a much easier route than reinventing the wheel all over again.

Before the changes were announced, MTDITSA was mandated from 2024, and applied to taxpayers who had £10,000 and above gross income (not profit) from either self-employment or property income. With pressure applied from accountants and taxpayers alike, the government decided that a delay was the best course to take. Not only a delay, but a whole shakeup to the rules. Now the start date for the phasing in of this new tax system has been moved back to April 2026, but this will only affect taxpayers with a gross income (not profit) of £50,000 or more. Then again the next year, 2027, for those with a turnover of £30,000 or more. For those with turnover of £30,000 or less, there are further announcements expected from 2027 on how the government will deal with this block of people.

So although I am sure many people will breathe a huge sigh of relief that this has been put back, and a lot have been taken out of the system, make no mistake, MTD will be upon us eventually, so it is best to get nice and prepared.

It is worth remembering that MTD will be a hugely different way to deal with your taxes, it doesn’t mean it is a bad thing. I for one think that after a year or two it will be as much a part of life as all the other new systems HMRC have brought in over the years, that are just now part of life.

Thanks for reading!