‘Making Tax Digital’ for Income Tax Self-Assessment delayed to 2024 announce HMRC
Businesses will have an extra year to prepare for the digitalisation of income tax, HM Revenue and Customs (HMRC) has announced this week.
Recognising the challenges faced by many UK businesses and their representatives as the country emerges from the pandemic, and having listened to stakeholder feedback, the Government will introduce Making Tax Digital (MTD) for Income Tax Self-Assessment (ITSA) a year later than planned, in the tax year beginning in April 2024.
It is hoped that a later start for MTD for Self-Assessment tax payers will give those required to join more time to prepare and for HMRC to deliver a robust service, with additional time for customer testing in the pilot.
Forming part of the Government’s ambition to become one of the most digitally advanced tax authorities in the world, Making Tax Digital is the first phase of HMRC's move towards a modern, digital tax service fit for the 21st century. It supports businesses through their digitalisation journey and provides a digital service that many have come to expect in their everyday lives.
Lucy Frazer, Financial Secretary to the Treasury, said: “The digital tax system we are building will be more efficient, make it easier for customers to get tax right, and bring wider benefits in increased productivity.
“But 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.
“We remain firmly committed to Making Tax Digital and building a tax system fit for the 21st century.”
MTD for ITSA will be mandated for businesses and landlords with a business income over £10,000 per annum in the tax year beginning in April 2024.
General partnerships will not be required to join MTD for ITSA until the tax year beginning in April 2025, while the date other types of partnerships will be required to join will be confirmed in the future.
In March 2020, the Government announced a new, fairer system of penalties for the late filing and late payment of tax for ITSA. The new penalty system for those who are mandated for MTD for ITSA will now come into effect in the tax year beginning in April 2024, and in the tax year beginning in April 2025 for all other ITSA taxpayers.
