WATCH: Scepticism growing towards MTD for ITSA

In December 2022, the government declared a revised approach for the implementation of MTD for Income Tax Self-Assessment (ITSA), indicating a phased introduction starting on 6 April 2026 instead of the planned year of 2024.

The announcement revealed that the initial phase would focus on self-employed individuals and landlords earning over £50,000, commencing in April 2026. Subsequently, starting from April 2027, it would extend to individuals with income surpassing £30,000. An ongoing assessment, specifically aimed at ‘small business’ considerations, is in progress to determine the potential extension to individuals earning under £30,000.

The most recent postponement marks the fifth time that MTD for ITSA has been pushed back from its initial target date of April 2018.

During June and July of 2023, the Chartered Institute of Taxation and CIOT and the Association of Taxation Technicians ATT conducted a survey among our members concerning their perspectives and encounters with Making Tax Digital (MTD). The survey was crafted to gather insights into the challenges members have encountered with MTD for VAT and to assist the ongoing dialogues with HMRC regarding MTD for ITSA.

In this conversation Emma Rawson (ATT) and Christopher Thorpe (CIOT) spoke to AA regarding the survey results and their predictions for MTD for ITSA.

Timestamps

00:00 Introductions

00:43 70% of respondents think that April 2026 is an unrealistic start date for MTD for ITSA

02:09 Trying to ease the scepticism surrounding MTD

02:59 Will MTD for ITSA go ahead on the planned date?

03:44 What can HMRC do to improve confidence in the current introduction date?

04:46 MTD for taxpayers with incomes under 30,000

08:24 The effect of HMRC’s customer service levels on MTD

12:10 HMRC’s meetings with industry bodies

14:01 MTD has cost far more than first predicted