The Government has announced that MTD for Income Tax Self Assessment (ITSA) will be introduced a year later than planned, beginning April 2024. Recognising the challenges faced by many businesses as the country emerges from the pandemic.

The later start allows more time for those required to join to prepare and for HMRC using the time for additional customer testing in the pilot.  

MTD for Income Tax will now be mandated for businesses and landlords with a business income over £10,000 per annum in the tax year beginning in April 2024.

General partnerships also have a 12 month postponement, required to join MTD for ITSA in April 2025. All other types of partnership’s commencement date will be confirmed at a later date.

The new system of penalties for the late filing and late payment of tax for ITSA, announced in March 2021, will accordingly be introduced for those mandated for MTD for ITSA in the tax year beginning from April 2024, and for all other ITSA customers in the tax year beginning in April 2025.   

Lucy Frazer, Financial Secretary to the Treasury, said:

"The digital tax system we are building will be more efficient, make it easier for customers to get tax right, and bring wider benefits in increased productivity.

But we recognise that, as we emerge from the pandemic, it’s critical that everyone has enough time to prepare for the change, which is why we’re giving people an extra year to do so.

We remain firmly committed to Making Tax Digital and building a tax system fit for the 21st century."

Read more on MTD here.