04 Mar 2024
HMRC has published guidance on the Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) requirements for sole traders and landlords.
MTD for ITSA will require businesses and landlords with qualifying income to maintain digital records and update HMRC each quarter via compatible software.
In the guidance, HMRC stated that MTD for ITSA will be introduced in two phases:
- from April 2026 for those with qualifying income over £50,000
- from April 2027 for those with qualifying income over £30,000.
HMRC said that MTD will exploit 'the opportunities offered by digitalisation to make it easier for everyone to get tax right'.
It said that digitalising government tax services helps to reduce the risk of unintentional customer errors; saves taxpayers time when they submit their tax returns; supports wider productivity and less time managing paperwork; and enables HMRC to better tailor its services to its customers.
In its latest guidance, HMRC estimates an average transitional cost of £115 for businesses mandated to use MTD for ITSA. Businesses within the £30,000 to £50,000 threshold are estimated to incur an average cost of £350 while those above £50,000 may incur an average cost of £285.
Internet link: GOV.UK