Delay to Making Tax Digital announce by the Government
As part of the rollout of greater digitalisation of our tax regime businesses with turnover in excess of £10,000 were due to be caught under the new rules from April 2023 meaning the necessity to use digital accounting software for Income Tax.
Today the government have announced a delay to Making Tax Digital for at least 12 months stating:
“The Government recognises the challenges faced by many UK businesses and their representatives as the country emerges from the pandemic over the last year. In recognition of this and of stakeholder feedback, we will now be introducing MTD for ITSA a year later, in the tax year beginning in April 2024.
General partnerships will not be required to join MTD for ITSA until the tax year beginning in April 2025. The date at which all other types of partnerships will be required to join will be confirmed later.
In March 2021, the Government announced a new system of penalties for the late filing and late payment of tax for ITSA. This will now be introduced for those who are mandated for MTD for ITSA in the tax year beginning in April 2024, and for all other ITSA customers in the tax year beginning in April 2025.
A later start for MTD for ITSA provides more time for those required to join to make the necessary preparations and for HMRC to deliver the most robust service possible, affording additional time for testing in the pilot”
This will be good news to many businesses, giving them time to adopt the new ways of working. However, there are a great many benefits to be had by working with software for business owners, putting them in greater control of their finances. If you would like to explore your options and get ready in advance then please look at the benefits to your business.