Making Tax Digital for businesses and the Self Employed delayed until 2026

Making Tax Digital for Self Employed delayed until 2026

The date change from April 2024 to 2026 was initially spotted on the gov.uk website last week but was quickly taken down – however a number of people spotted it, leading to intense speculation in the financial press that the Treasury’s plans to roll out the Making Tax Digital system to an extra 4.2 million self-employed people and smaller businesses would be delayed for another two years.

Today’s announcement from the Treasury confirms these delays for Making Tax Digital for Income Tax Self-Assessment (or MTD ITSA) and states that:

“The government is …. announcing more time to prepare, so that all businesses, self-employed individuals, and landlords within scope of MTD for Income Tax, but particularly those with the smallest incomes, can adapt to the new ways of working.

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 mandated to join first.

Those with income over £30,000 will be mandated from April 2027…. the government will not extend MTD for ITSA to general partnerships in 2025. It remains committed to introducing MTD for ITSA to partnerships at a later date.”

Ryan Pearcy, SB Digital Director commented: “I guess it was inevitable that MTD ITSA has been delayed again. HMRC’s systems are simply not ready and given the current ongoing issues for agent authorisation for VAT it would have been a disaster to launch the pretty much untested MTD ITSA platform.

“That said, so many businesses, accountancy firms and software vendors have invested significant amounts of money in getting ready for the launch date that this will hurt. Those that have done nothing already will be relieved and those that have done a lot will feel frustrated. As for the government, what was spoken about as putting the UK ahead of other countries in regard to the tax system. In reality, constant delays are leaving the UK left behind as other countries push forward with digital invoicing.”

What should self-employed workers and small businesses do?

Whilst this postponement pushes back the start date for MTD ITSA, self-employed workers and small businesses should continue to plan. While there may be extra work to do in setting up digital tax filing systems, there are benefits too in the additional management information these systems can provide. It is strongly recommended that businesses get familiar with the MTD software well before it is time to press the bug red button to start submitting quarterly tax returns digitally to HMRC.

If you are confused about how MTD will work for you as a self-employed person or small business, or need help setting up compliant digital systems, then get in touch with the Scrutton Bland team. Our MTD experts will quickly be able to identify all the options available to you and get your business ready for MTD ITSA.