MTD for ITSA – new timetable announced

The Government has formally announced the following update with reference to the implementation of Making Tax Digital for Income Tax Self Assessment (MTD for ITSA):

MTD for ITSA filing will not become mandatory until April 2026;
from that date, only the self employed and landlords with an income of £50,000 or above will need to comply;
taxpayers with income of £30,000 or more will have to join the scheme from April 2027. Further consultations will take place to decide how taxpayers with income of less than £30,000 will be dealt with under the MTD for ITSA scheme, as well as confirming when partnerships will have to comply.

For more information about the latest MTD for ITSA changes please download our MTD for ITSA Guide.

At Absolute, we are pressing ahead with the development of our ITSA Filer bridging software so that this will be ready to help you and your clients as and when you want to use it, potentially well ahead of the new deadline. Our software already covers the different type of businesses mentioned in the guidance and is ideal for those looking for various solutions relevant to their clients, not a ‘one size fits all’ product.

The interest we have received to date about our ITSA Filer software has been phenomenal, which is largely down to the success of our Excel VAT Filer bridging software. To date, our VAT Filer has been used to file around 5% of all VAT returns in the UK since MTD for VAT became mandatory. We are anticipating a similar take up for our ITSA product.

HMRC have confirmed that bridging software will continue to be a long-term viable option for complying with MTD for ITSA as well as MTD for VAT. For more information you can download our free MTD Bridging Software Factsheet.

Basis period change to go ahead as planned

The Government’s statement did not mention the change in the basis period which is due to move to a tax year basis from April 2024, with 2023 being the transitional year. We therefore assume that this is going ahead as planned. We would urge you to take a look at our MTD Basis Period App which shows you the options available for potentially reducing tax bills depending on when you move from an accounts to a tax year basis.

If you were delaying a change of software until the MTD roll out, the delay in MTD mandation may force you to act sooner. Before you do, speak to the Absolute team who’d be happy to talk you through our Integrated and TopUp packages.

Absolute’s stance is to provide our customers with the truth, and we will keep you up to date with any further official announcements. We will continue to listen to your needs and will take care to help you make the transition to MTD for ITSA as simple as possible.

If you have any questions concerning the Government’s revised timetable, the criteria for complying with MTD for ITSA and how our software is being developed, please don’t hesitate to get in touch by emailing dave@absolutetax.co.uk.