0:03 AM, 20th December 2022, About 9 months ago 5
The Government has announced that the introduction of its flagship ‘Making Tax Digital’ (MTD) scheme for Income Tax Self Assessment has been shelved for two years
The scheme was a crucial part of the government’s strategy for tax administration and would mean individuals and businesses keeping digital records and using a software program that is compliant with Making Tax Digital.
Taxpayers would have to submit their updates every quarter which would bring the tax system closer to what the government says would be ‘real-time’.
However, it has been announced that the introduction of MTD will now be phased in and landlords and self-employed individuals will now get more time to prepare.
The issue of MTD has created an issue for readers of Property118.com with many landlords highlighting that they are struggling to find compliant software programs.
Moving to the new system will see lots of landlords having to invest in new computers and software for submitting their Income Tax Self Assessment (ITSA) forms.
But now the governments say it is aware that landlords and the self-employed are facing a ‘challenging economic environment’ and that MTD would mean a significant change to taxpayers.
The mandatory use of software is now being phased in from April 2026, rather than April 2024.
From April 2026, it will mean that:
The government says it is looking at solutions for those who are declaring less than £30,000 and how MTD ‘can be shaped to meet their needs’.
The financial secretary to the Treasury, Victoria Atkins, said: “It is right to take the time to work together to maximise the benefits of Making Tax Digital for small businesses by implementing the change gradually.
“It is important to ensure this works for everyone: taxpayers, tax agents, software developers, as well as HMRC.”
She added: “Smaller businesses in particular should be able to experience the benefits of increased digitalisation of income tax in a way which meets their needs.
“That is why we are also announcing a review to establish the best way to achieve this.”
The government’s announcement relates to MTD for ITSA only – Making Tax Digital for VAT has already been implemented.
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