Extension Of MTD for ITSA

The UK government’s Making Tax Digital (MTD) initiative aims to modernise the tax system by requiring individuals and businesses to maintain digital records and submit regular updates to HM Revenue & Customs (HMRC). Initially, MTD for Income Tax Self-Assessment (ITSA) was set to apply to sole traders and landlords with income over £50,000 from April 2026, and those with income over £30,000 from April 2027. ​

The Extension

The government’s recent fiscal events have extended the scope of MTD for ITSA. Hidden away in the most recent Autumn Statement, the government made the announcement that MTD would be extended to sole traders and landlords with annual business and/or property income over £20,000 by the end of the current Parliament, which concludes in 2029.

The government has now made good on this commitment and announced in the Spring Statement that MTD for ITSA will be extended to sole traders and landlords with annual business and/or property income over £20,000 with effect from April 2028. There has, however, been no further updates regarding the inclusion of individuals with income below £20,000 in the MTD framework. Therefore, it appears that those with qualifying income under £20,000 will not be mandated to adopt MTD for ITSA for the time being.

Approaching The £20,000 Income Threshold?

For sole traders and landlords approaching the £20,000 income threshold, it’s essential to stay informed about potential changes to MTD regulations. Proactively adopting digital record-keeping practices can facilitate a smoother transition if and when MTD becomes applicable. Additionally, engaging with tax professionals and utilising HMRC’s resources can provide valuable guidance during this period of tax system modernisation.

Get In Touch

Please do get in touch with your local office to find out how they can help you prepare for MTD for ITSA further.

Disclaimer - All information in this post was correct at time of writing.