Many businesses and agents are already keeping digital records and providing updates to HMRC as part of a live pilot to test and develop the Making Tax Digital (MTD) for Income Tax Self-Assessment (ITSA). Under the pilot, qualifying landlords and sole traders (or their agents) can use software to keep digital records and send Income Tax updates instead of filing a Self-Assessment tax return.
The full launch of MTD for ITSA is expected to start from 6 April 2024. The rules will initially apply to taxpayers who file ITSA returns with business or property income over £10,000 annually. General partnerships will not be required to join MTD for ITSA until a year later, in April 2025. A new system of penalties for the late filing and late payment of tax for ITSA will also apply. Taxpayers interested in signing up for the pilot should contact their software provider or agent for further information.
HMRC’s guidance on who can use the pilot has been updated as the pilot has been expanded. Currently to be eligible, taxpayers need to have an accounting period that aligns exactly to the tax year (6 April to 5 April) to join the 2022-23 pilot. The option to sign-up as an individual for MTD for ITSA is currently only available to individuals using a recognised provider offering software that is compatible with MTD for ITSA.
The pilot currently needs taxpayers who file for:
- self-employment (including multiple self-employments)
- UK property
- Gift Aid
- Pay As You Earn income, including employment income and occupational pensions (excluding those with a coded-out liability)
- UK interest
- UK dividends
Later this tax year, the pilot will be expanded to include the following customer types
- pension contributions
- CIS
- Student Loans
- additional Self-Assessment (SA 101)
- foreign income from property
- voluntary class 2 NICs
- capital gains
- marriage allowance.
With Making Tax Digital for Income Tax Self‑Assessment (MTD for ITSA) becoming mandatory for more taxpayers, early preparation is key to avoiding disruption and penalties. At CIGMA Accounting, we support, landlords, contractors, and online businesses in transitioning to digital record‑keeping, selecting compliant software, and meeting ongoing MTD reporting obligations with confidence.
Our experienced accountants work with clients through our London offices in Fulham Broadway and Kingston upon Thames, as well as nearby areas including Parsons Green, Imperial Wharf, Surbiton, and Norbiton, providing practical, hands‑on support for MTD onboarding and compliance.
Speak to our tax experts today to prepare for MTD for Income Tax and ensure your business or property income is reported correctly.
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