Digitally deferred

Post by Mearns & Company in News

HMRC’s plans for digital tax have been delayed…again.

In December 2015 HMRC published ‘Making Tax Digital’ (MTD), a paper in which it said ‘By 2020, businesses and individual taxpayers will be able to register, file, pay and update their information at any time of the day or night, and at any point in the year, to suit them. For the vast majority, there will be no need to fill in an annual tax return.’

It has not quite worked out that way.

Implementation has slowed

Almost exactly seven years after the original MTD paper was published, a House of Commons written statement revealed the introduction of the MTD regime for the self-employed and landlords, requiring income and expense data to be submitted online quarterly, would be deferred for at least two years:

  • For those with a gross income of over £50,000 a year, MTD will now become mandatory from April 2026.
  • Those with gross income of over £30,000 a year will join MTD from April 2027.

What will happen to the self-employed and landlords with income of £30,000 or less is unclear – the government has promised a review. General partnerships have similarly been told their start date has been deferred from April 2025 ‘to a later [unspecified] date’.

It seems certain that MTD for income tax will eventually happen, but at least for now it remains confined to VAT.

The Financial Conduct Authority does not regulate tax advice. Tax treatment varies according to individual circumstances and is subject to change.

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