MTD for ITSA delayed for two more years

The Treasury has announced that Making Tax Digital for income tax self assessment (MTD for ITSA) will be delayed for two more years until April 2026.

MTD for ITSA was due to take effect from April 2024 and would’ve required all self-employed individuals and landlords with income over £10,000 to report earnings quarterly through the MTD for ITSA system.

HMRC have however realised the last thing small businesses or landlords need is more administration burden at a time when we all need to focus on working smarter and increasing income to stand still.

Originally if you had income above £10,000 as a sole trader or landlord you would have been required to submit quarterly profit and loss reports to HMRC in addition to your year-end tax submission. Thankfully Victoria Atkins, Financial Secretary to the Treasury, confirmed that the mandation of MTD for ITSA will now be introduced from April 2026, with businesses, self-employed individuals and landlords with income over £50,000 required to join first. From April 2027, those with income over £30,000 will be mandated to join.

The government now intends to review the needs of smaller businesses in regard to MTD for ITSA, and will consider how the initiative can be shaped to meet their needs.

Once the review is finalised, the government will outline plans for any further mandation of MTD for ITSA.

It was also announced that they will not extend MTD for ITSA to general partnerships in 2025 as planned, but they remain committed to introducing this at a later date.

Whilst this is very welcome news to small businesses and landlords in our experience the best and most profitable businesses and individuals do not leave their tax bills to chance. They are already completing monthly or quarterly analysis of performance, allowing them to adapt to change quickly. At A4G, we are firm believers that annual accounting should be a thing of the past. But this means taking your own initiative to moving to cloud accounting software and monthly or quarterly management information to enable informed business decisions and growth.

Do it for yourself and your business, not the government.