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<\/figure>\n<\/div>\n\n\nSince its announcement in 2015<\/a>, you\u2019ve probably heard a lot of chatter about Making Tax Digital. Or MTD for short.<\/p>\n\n\n\n It\u2019s a scheme designed by the government to digitalise the tax system<\/a>. This means that businesses will have to keep digital records, use software that works with MTD, and submit tax updates every quarter.<\/p>\n\n\n\n It replaces the old tax return system and is already up and running for VAT payments.<\/p>\n\n\n\n We\u2019re talking about it here because of an update to the Income Tax for Self-Assessment part of the scheme, which is aimed at sole traders and landlords. To make things easier, we\u2019ll call this ITSA from now on.<\/p>\n\n\n\n On 19 Dec 2022, HMRC announced a delay to the launch of MTD for ITSA<\/a>.<\/p>\n\n\n\n There were still loads of question marks over how MTD would work for self-assessment taxpayers. The sign-up process was only opened up in 2022<\/a>. And taxpayers were worried about the new rules around using specific software.<\/p>\n\n\n\n This quiet announcement by HMRC has come as a bit of a surprise. Albeit a welcome one for many of the 4.2 million self-employed people affected by MTD for ITSA<\/a>. Especially given how long they\u2019ve delayed the launch\u2026<\/p>\n\n\n\n <\/p>\n\n\n\n Before the announcement, MTD for ITSA was set to launch on 6 April 2024. But HMRC has decided to delay this to one of two new dates, depending on your business\u2019 income.<\/p>\n\n\n\n If your income is over \u00a350,000<\/strong>, MTD for ITSA will launch in April 2026. Taxpayers with income over \u00a330,000<\/strong> will have an extra year, with a launch in April 2027.<\/p>\n\n\n\n Even if you\u2019re a bit relieved about the delay, you might be wondering why HMRC have made this decision.<\/p>\n\n\n\n Victoria Atkins, Financial Secretary to the Treasury, summed it up in the announcement:<\/p>\n\n\n\n ‘It is right to take the time to work together to maximise the benefits of Making Tax Digital for small businesses by implementing the change gradually. It is important to ensure this works for everyone: taxpayers, tax agents, software developers, as well as HMRC.<\/em>‘<\/p>\n\n\n\n Still confused? Well, it comes down to a few things that Victoria Atkins and Jim Harra, Chief Executive and First Permanent Secretary of the HMRC, alluded to in the announcement. The government want to:<\/p>\n\n\n\n The delay will make sense to a lot of taxpayers. But with the announcement, you might be thinking\u2026<\/p>\n\n\n\n <\/p>\n\n\n\n An extra couple of years might be a tempting reason to put off changing your tax processes. After all, it\u2019ll take time and might cost a fair bit of money to adapt to MTD for ITSA. Especially if you complete tax returns by paper or unsupported software.<\/p>\n\n\n\n HMRC has thought of this, though, and has encouraged businesses to sign up as early as they can.<\/p>\n\n\n\n They want businesses to have time to get used to the new system. So that by 2026, the switchover is more of a formality.<\/p>\n\n\n\n HMRC have created a guide for checking if you\u2019re eligible<\/a>. If you are, you can sign up through this page<\/a> or by speaking to your tax adviser.<\/p>\n\n\n\n There are a few exceptions:<\/p>\n\n\n\n <\/p>\n\n\n\n MTD for ITSA is going to affect self-assessment taxpayers in a few different ways:<\/p>\n\n\n\n This might be a worrying prospect for you. Filing taxes isn\u2019t easy at the best of times, but having to learn a new system? Sounds stressful.<\/p>\n\n\n\n Well, the HMRC seems to be aware of this. That\u2019s why they\u2019ve given self-assessment taxpayers an extra couple of years to get ready.<\/p>\n\n\n\n And they\u2019ve offered a few reasons why this new scheme is worth the short-term stress<\/a>:<\/p>\n\n\n\n <\/p>\n\n\n\n \u2026 At least that\u2019s what HMRC are hoping. Either way, this delay gives you an opportunity to get ready for MTD for ITSA.<\/p>\n\n\n\n If you\u2019d like to find out more, HMRC\u2019s overview of MTD<\/a> is a great resource to get started.<\/p>\n\n\n\n We can\u2019t help with your tax returns, but we can help you with your business insurance. For more info, click here<\/a> or call us on 0345 561 0320.<\/strong><\/p>\n\n\n\n Image used under license from Shutterstock. <\/em><\/p>\n","protected":false},"excerpt":{"rendered":" Since its announcement in 2015, you\u2019ve probably heard a lot of chatter about Making Tax Digital. Or MTD for short. It\u2019s a scheme designed by the government to digitalise the tax system. This means that businesses will have to keep … Continue reading What is the new Making Tax Digital for ITSA start date, and why has it been delayed?<\/strong><\/h2>\n\n\n\n
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Do I have to worry about MTD for ITSA yet?<\/strong><\/h2>\n\n\n\n
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How will MTD for ITSA affect me?<\/strong><\/h2>\n\n\n\n
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Making Tax Digital isn\u2019t as taxing as it seems<\/strong><\/h2>\n\n\n\n