The UK government is to introduce Making Tax Digital (MTD) for Income Tax Self Assessment a year later than planned, in the tax year beginning April 2024, UK tax authority HMRC has announced.
MTD for Income Tax will now be mandated for businesses and landlords with a business income of more than £10,000 per annum in the tax year starting in 2024.
This approach to tax requires businesses to use software compatible with the MTD scheme to keep digital records and send Income Tax updates quarterly instead of sending a Self Assessment tax return.
The government set out the steps businesses should take to use the service, while it laid regulations that set out the technical details of the scheme.
Lucy Frazer, the UK government’s Financial Secretary to the Treasury, said the new digital tax system will be more efficient, easier for customers to get tax right, “and bring wider benefits in increased productivity”.
She added: “[We] recognise that, as we emerge from the pandemic, it’s critical that everyone has enough time to prepare for the change, which is why we’re giving people an extra year to do so.”
Partnerships
General partnerships will not be required to join MTD for Income Tax until the tax year beginning April 2025. Other types of partnerships will be required to join at a future date to be confirmed.
MTD does not, HMRC said, change when taxpayers need to pay their tax. Additionally, this delay does not affect the MTD for Income Tax pilot, which will continue as planned.
MTD was first introduced in 2019, requiring companies and other organisations to manage their value-added-tax records and filings digitally.
— Oliver Rowe (Oliver.Rowe@aicpa-cima.com) is an FM magazine senior editor
