It has recently been announced that the digital tax system introduction has been postponed from 2024 to 2026.
Making Tax Digital for Income Tax Self Assessment (MTDITSA) is the new system that applies to those with income from either properties or self-employment.
MTDITSA replaces 1 tax return after the year end with 5 ‘tax returns’ – 4 quarterly returns during the actual year as well as a final return after the year ends. It also enforces the keeping of records digitally, with digital links for submission, rather than by whichever methods are most convenient.
It was due to apply from April 2024 to those with income from properties or self-assessment of above £10,000pa.
The new timescales:
There are now two different introductory dates, depending on the amount of income received each year:
6th April 2026 – for those with income from properties or self-employment of above £50,000pa.
6th April 2027 – for those with income from properties or self-employment of above £30,000pa.
The systems will be reviewed to see if others who have property or self-employment income of below £30,000pa will need to join at a later date.
The initial year problem:
As before, an increased workload applies to those who are in their introductory year as they will be completing two different tax years at the same time:
2025/26 tax return to 5th April 2026 and
2026/27 MTDITSA – digital records required and quarterly ‘tax returns’ from 6th April 2026.