MTD ITSA delayed for two years

In a statement released on 19 December, the government has finally acknowledged that MTD ITSA is a significant change for all concerned, and that launching during an economic crisis is not ideal. MTD ITSA will now be delayed until April 2026, with the self-employed and landlords with turnover in excess of £50,000 joining first. Those with income over £30,000 but not exceeding £50,000 will not need to join until April 2027. A start date for general partnerships has not yet been announced.

The government will now review the needs of smaller businesses before asking those earning less than £30,000 to join. Previously MTD ITSA was going to be mandatory for the self-employed/landlords earning over £10,000. Given the expected additional costs and administrative burden for small businesses this will undoubtedly be a very welcome change. However, HMRC will have its work cut out when operating different systems for self-assessment customers so further delays could be on the cards.

Note. This does not affect the move to tax year basis periods, which will be effective from 2024/25 after next year’s transition.