Back to Blog

Changes to the introduction of Making Tax Digital

Posted 31/01/2023 by Reeds Rains
Child on persons back looking at a tablet computer

Making Tax Digital for Income Tax (MTD) is a government programme to move self-employed businesses and landlords onto an entirely digital tax reporting system. 

The aim is to improve accuracy and efficiency and make it easier for those completing Self Assessment returns to get their income tax right. Records of income and expenditure will have to be kept digitally and MTD-compatible software used to make quarterly reports to HM Revenue & Customs (HMRC).

Last year, due to the impact of the pandemic, the MTD programme was pushed back from its planned enforcement date of April 2023 to April 2024. Now, because of the current challenging economic environment and understanding that the transition to digital reporting will be a significant change for Self Assessment taxpayers, the government has amended its plans once again.

In her statement in December 2022, The Financial Secretary to the Treasury, Victoria Atkins, said: “It is right to take the time needed to work together to maximise those benefits of MTD for small business by implementing gradually. The government is therefore announcing more time to prepare, so that all businesses, self-employed individuals, and landlords within scope of MTD for Income Tax, but particularly those with the smallest incomes, can adapt to the new ways of working.”

What are the new changes?

The first significant change is the dates when MTD becomes mandatory: April 2026 for self-employed individuals and landlords with an income of more than £50,000, and April 2027 for those earning between £30,000 and £50,000.

The second big change is that only those earning over £30,000 will have to comply with the MTD rules – at least initially – whereas the original threshold was £10,000. Now, if your income is under £30,000, you will not be mandated to use the scheme until a review has been completed into how MTD can be shaped to meet the needs of smaller businesses and the best way for them to fulfil their tax obligations.

A live pilot is already up and running, so if you’d like to get ahead of the deadline and iron out any initial issues with using the software before it becomes mandatory, you can sign up now and start sending quarterly updates to HMRC.

VAT registered businesses

If your property business is registered for VAT, you should already be signed up to Making Tax Digital for VAT. And from now on, HMRC will automatically sign up businesses – there’s no need to do it yourself. Full information is available via the GOV.UK website.


Get a Mortgage in Principle in just 15 minutes with our Embrace Financial Services**

Book a Buy to Let mortgage appointment

**A Mortgage in Principle provides you with an indication of what you can borrow, it is not guaranteed until you receive a mortgage offer from the lender. 

YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

Your initial mortgage appointment is without obligation. Embrace Financial Services normally charge a fee for their services; however, it is payable only on the submission of your mortgage application. The fee will depend on your circumstances but the standard fee is £549. Complex cases usually attract a higher fee. Embrace Financial Services will discuss and agree the fee with you prior to submitting any mortgage application.

Please be aware that the information provided within these archives has been pre-published, as of the date published on each article. The information contained within, including references to taxation, legislation, regulation, or any other issues or concerns may no longer apply.

Signup for Updates

Get the latest news from Reeds Rains direct to your inbox

Signup for Updates

Get the latest news from Reeds Rains direct to your inbox