Insights | Accounting, Income Tax, MTD, Stretford, Tax

MTD for Income Tax delayed until 2026

The Government has announced a two-year delay in the roll out of Making Tax digital (MTD) for Income Tax along with significant changes to Income thresholds for those affected.

MTD for Income Tax had originally been agreed to commence in April 2024, with all landlords and self-employed businesses that had a total Income above £10,000 per year were required to abide by MTD rules from April 2024.

However, the Treasury released a statement on 19^th December 2022 setting out major but significant changes to the scope and timing of MTD for Income Tax. The key points/changes are as follows:

• MTD for Income Tax will now be delayed until April 2026, which is two years later than the previous scheduled start date of April 2024. 
• A staging method will be implemented so that self-employed individuals and landlords with Income exceeding £50,000 will be legally required to comply.
• The second tier, those earning more than £30,000 but less than £50,000 will be mandated to comply in 2027.
• The third tier, self-employed individuals and landlords with Income less than £30,00 the government will review and lay out mandatory steps required in order to comply.

Other Points Highlighted

• Partnerships were originally scheduled by the Government to comply with MTD for Income Tax from April 2025, however, they are yet to confirm an official date from when MTD Income Tax for partnerships will apply.
• Limited companies will also see the Government confirm an official date from which MTD will apply. 

Summary

Making Tax Digital may have been delayed, but preparing early can save time and avoid future disruption. Accounting Solutions Manchester can help you get ready with the right software, expert advice, and ongoing support. Reduce tax, increase profit, and save time. Call us today on 0161 879 7175 for a free, no-obligation consultation.