Government delays MTD for income tax and basis period reform
Following vocal representation from various professional bodies, the government has agreed to delay crucial reforms to the tax system. What’s the full story?
On 23 September 2021 the secondary legislation for implementing Making Tax Digital for Income Tax Self-Assessment (MTD ITSA) was published. The new regulations confirm that MTD ITSA will be implemented for self-employed trading income and property income. However, the implementation date will now be 6 April 2024 rather than 2023. All sole trade businesses and landlords will come within MTD ITSA from that date. General partnerships will follow twelve months later, with other types of partnership in subsequent years yet to be confirmed. The new penalty system that was due to be introduced alongside MTD ITSA will also be pushed back to 2024.
Further welcome news came via a ministerial statement concerning basis period reform. The statement says that the reform will now not take place until April 2024 at the earliest, which would mean the transition year would be in 2023/24 not 2022/23. A statement on whether the reform will be dropped completely is expected at next month’s Budget - though we currently believe this is unlikely.
Related Topics
-
HMRC publishes penalty guidance for MTD IT
HMRC has published guidance on how penalties will apply under Making Tax Digital for Income Tax (MTD IT). With mandation approaching from April 2026, what do you need to know about the new regime?
-
Company car calculator
Want to know the amount of the benefit you will be taxed on by taking a company car? Easily work that out with our tool, you can even see what difference making a contribution to the cost of the car will have.
-
Pension relief calculator
Sometimes the tax relief you get on a pension is easy to work out, and sometimes it isn’t. Let our calculator do it for you and show the effect on your pension fund.