MTD for Income Tax delayed – but getting ahead of the game could have its benefits
5th January 2024 
Tax 
CHW Accounting
Back in September 2021, we reported that Making Tax Digital (MTD) for Income Tax Self-Assessment (ITSA) would be postponed until April 2024.
Now, here we are in 2024 with April fast approaching and just in case any of you are panicking, we want to take this opportunity to remind you that as things currently stand, the first phase of MTD for ITSA will now not begin until April 2026.
Whilst this could cause some to feel relieved, we urge you to consider whether using cloud based software in advance of the deadline could have real benefits for you and your business.
What is MTD for Income Tax?
MTD is a government initiative designed to digitalise taxes in the UK and according to HMRC will mean that taxpayers will find it easier to get their tax right.
It is worth pointing out here that embracing digitalisation is not just about MTD compliance – tools and software can help you run a healthier business by demystifying your financial position with forecasts, reports, and live feeds accessible to both you and your accountant at any time.
Why does MTD keep being delayed?
In 2021, the delay was because the government was recognising the challenges as the country emerged from the pandemic. Latterly, it has been delayed to give those required to join more time to prepare and for HMRC to deliver a robust service, with additional time for customer testing.
Don’t be fooled into thinking that MTD is not going to happen. In spite of the slowdown in pace, digital transformation is still the direction of travel.
Even if you don’t want to get ahead of the game, there is no harm in being prepared for when you have to comply, so here is a quick reminder of what you need to consider before April 2026.
Who will need to sign up?
You will need to use MTD for Income Tax from 6 April 2026 or 6 April 2027 if all of the following apply:
- You are registered for Self-Assessment
- You get income from self-employment or property, or both
- You are not exempt
- Your total qualifying income is more than £50,000 (from April 2026) or £30,000 (from April 2027)
If these apply, when you will need to sign up although if you can show that it’s not reasonable or practical for you to use computers or the internet, you can apply for an exemption.
Who will not need to sign up?
You do not need to sign up if your qualifying income is £30,000 or less, but you can still choose to voluntarily through your software provider if you wish.
You are automatically exempt and cannot sign up for MTD if you are a:
- Trustee, including a charitable trustee or a trustee of non-registered pension schemes
- Person that does not have a National Insurance number
- Personal representative of someone who has died
- Lloyd’s member, in relation to your underwriting business
- Non-resident company
You can visit the government website to find out when you must meet with the MTD for Income Tax requirements here.
Our advice
Rather than breathing a sigh of relief, see this delay as an opportunity to find the right tools and hone your digital skills ahead of the deadline – use the time to learn how you can reap the most rewards from cloud-based software.
You might also want to explore how MTD for ITSA software can help you with other aspects of your business, and we are experts in this field.
To explore how digitalisation could work for you, get in touch at hello@chw-accounting.co.uk
This article is for general guidance only. It provides an outline, and may not include points which are important to your situation. You should not depend on this blog without taking advice based on the full facts of your case. The information given was correct at the time of publication.
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