MTD ITSA delayed for two years
The government has announced a further delay to the introduction of Making Tax Digital for Income Tax Self-Assessment (MTD ITSA). Why and what's the new timeframe?
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HMRC clarifies treatment of averaging relief under MTD IT
HMRC has updated its guidance to explain how averaging relief claims will operate under Making Tax Digital for Income Tax (MTD IT). The clarification addresses concerns about how farmers and creators will claim relief once quarterly reporting becomes mandatory. What has changed?
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Double up on the employment allowance
You’re the sole shareholder of a limited company which employs several members of staff. You’re working on plans to start another business with an ex-colleague. Can both businesses benefit from the full employment allowance (EA)?
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VAT cut for children's holiday activities over summer
The government has announced a temporary reduction in the rate of VAT applying to certain children's holiday activity programmes during the summer holidays. The measure is intended to help families with childcare costs during the school break. What has changed?
In a statement released on 19 December, the government has finally acknowledged that MTD ITSA is a significant change for all concerned, and that launching during an economic crisis is not ideal. MTD ITSA will now be delayed until April 2026, with the self-employed and landlords with turnover in excess of £50,000 joining first. Those with income over £30,000 but not exceeding £50,000 will not need to join until April 2027. A start date for general partnerships has not yet been announced.
The government will now review the needs of smaller businesses before asking those earning less than £30,000 to join. Previously MTD ITSA was going to be mandatory for the self-employed/landlords earning over £10,000. Given the expected additional costs and administrative burden for small businesses this will undoubtedly be a very welcome change. However, HMRC will have its work cut out when operating different systems for self-assessment customers so further delays could be on the cards.
Note. This does not affect the move to tax year basis periods, which will be effective from 2024/25 after next year’s transition.
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