There has been much speculation in recent months about the Government’s plans to introduce Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) with effect from April 2024.
Industry leaders and the team at RPG Chartered Accountants have been very vocal in their concerns that it was going to put an unnecessary burden on the tax payers affected by the proposed legislation, plus there were complexities that had not been resolved by HMRC.
MTD for ITSA has now been deferred to April 2026 and the income threshold has been increased from £10,000 to £50,000.
From April 2026, self-employed individuals and landlords with an income of more than £50,000 will be required to keep digital records and provide quarterly updates on their income and expenditure to HMRC through MTD-compatible software. From April 2027, those with an income of over £30,000 will be affected.
It had been planned for partnerships to be brought into MTD for ITSA from 2025 but this also has been deferred.
Carolyn Dutton, Group Director and Head of the Business Services team at RPG Chartered Accountants commented, “It is massive relief that MTD for ITSA has been delayed. I was very concerned by the additional burden and cost that would have been put onto clients at a time when so many small businesses are struggling.
“We find that the use of digital bookkeeping for small businesses is a huge benefit to business owners and we will still be encouraging clients to make the switch from paper records.
“Digital records allow clients to keep a close track on their finances in real time and also allow for better planning and cash flow forecasting. It empowers clients to manage their businesses more easily.”
If you would like to discuss making the switch to digital bookkeeping please get in in touch by emailing info@rpg.co.uk or speak to your usual contact at RPG Chartered Accountants.
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