In a surprise announcement yesterday, HM Revenue and Customs (HMRC) announced that the introduction of Making Tax Digital (MTD) has been postponed until April 2026. From that date, self-employed individuals, and landlords with an income of more than £50,000 will be required to keep digital records. They will need to provide quarterly updates on their income and expenditure to HMRC through MTD-compatible software. Those with an income of between £30,000 and £50,000 will need to do this from April 2027.
The move has been met with mixed reactions. some people have welcomed the extra time to prepare for the changes, while others have expressed frustration at the delay.
When was Making Tax Digital originally scheduled?
Making Tax Digital was originally scheduled to be introduced in April 2019, and then April 2024, but has faced several delays and setbacks. The system requires taxpayers to use compatible software to record and report their income and expenditure to HMRC on a quarterly basis. It is intended to make the tax system more efficient and reduce the risk of errors.
HMRC has stated that the postponement is due to the ongoing impact of the COVID-19 pandemic and the need to focus on supporting businesses and individuals through these difficult times.
“We understand that the past year has been incredibly challenging for many taxpayers and businesses, and we want to ensure that they have the time and support they need to prepare for the introduction of MTD,” said an HMRC spokesperson.
In the meantime, HMRC has encouraged taxpayers to continue to use its online services to file their tax returns and make payments as normal.
Want to keep up-to-date with all changes?
If you’re a landlord and you would like more information on the topic, you can contact our team here or view our past webinars where we discuss Making Tax Digital.