A change has been made to the introduction of Making Tax Digital (MTD) which was announced in a Written Statement to Parliament that states that MTD for Income Tax Self-Assessment (ITSA) has been delayed for a year, making the new introduction date April 2024.This has been done for multiple reasons including the difficulties faced due to the pandemic as well as input and feedback from interested parties.

The aim of MTD is to make it easier for businesses to interact with HMRC and stay on top of their tax affairs. MTD will require individuals and businesses to register, file, pay and update their information using an online tax service. After April 2024, these rules will be applicable to any taxpayers whose ITSA tax returns from business or property income is over £10,000 per annum.

For general partnerships, MTD on ITSA’s will not be required until April 2025. The date for the implementation of MTD on other types of partnerships is yet to be confirmed. The new penalty points system for late submissions and payments of tax for ITSA will also align itself with the new MTD introduction date.

More information on the penalty points system can be found here:

https://www.gkaccountingservices.com/hmrc-introduces-a-new-penalty-points-system

The MTD system has already been implemented on a small scale to some businesses and agents who are already keeping digital records for HMRC as part of a live pilot test to develop the MTD system for ITSA. This pilot will now be extended into 2022-23 ready for larger scale testing to take place in 2023-24. Under this live pilot scheme, landlords and sole traders who qualify can keep digital records and send Income Tax updates in place of submitting a Self-Assessment tax return.



Making Tax Digital started back in April 2019 for VAT purposes where businesses with a turnover of higher than the VAT threshold of £85,000 were mandated to maintain digital records and provide their VAT return information to HMRC through MTD suitable software. From April 2022, Making Tax Digital will be applicable to all VAT registered businesses with a turnover below the previously mentioned VAT threshold.