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The Treasury has confirmed that Making Tax Digital for income tax self-assessment (MTD for ITSA) will be delayed a further two years until April 2026.
According to First Secretary to the Treasury Victoria Atkins, this phased approach will give businesses more time to prepare and adapt to new ways of working.
The minimum reporting level for businesses, self-employed individuals and landlords will be increased from £10,000 to £50,000, with those earning over £30,000 not needing to comply with MTD rules until 2027.
The Government will also launch a review into how MTD for ITSA can better serve the needs of smaller businesses, particularly those earning less than £30,000 a year.
Partnerships will not be brought into MTD for ITSA in 2025 as previously planned, and will instead be mandated to join the scheme at a later date.
Furthermore, a points-based system aimed at making penalties fairer and simpler will come into effect for taxpayers when they join MTD for ITSA.
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