Making Tax Digital for income tax (MTD for ITSA) looks certain to affect sole traders and landlords from April 2024, following the recent news of a one-year delay.
This was the latest in a long line of delays and deferrals in the rollout of MTD, which was first proposed by then-Chancellor George Osborne in late 2015.
Small businesses were originally due to be the first to go through MTD in April 2018, at which point the focus switched to MTD for VAT. MTD for ITSA was to be delayed until lessons had been learnt from the VAT rollout.
MTD for VAT started on time for most of the UK’s VAT-registered firms with VAT periods starting on or after 1 April 2019, although “complex” entities had a deferred start date to 1 October 2019.
A similar deferral is in place for general business partnerships, with these “ordinary partnerships” due to enter MTD for ITSA from April 2025.
At the time of writing, there’s no indication of when other more complex partnerships will have to join MTD, and we don’t know if MTD for corporation tax will start as planned from April 2026.
Find out more in our Making Tax Digital Active Practice Update
Our latest Active Practice Update provides detailed guidance on the key elements of MTD including what sole traders and landlords can do to prepare for the changes coming into force in less than 2 years time.
If you would like to discuss in more detail any of the issues raised in this article with a member of our team, please call 01772 741200