Autumn Budget 2024: Making tax digital for ITSA

Amongst all the headlines, you may have missed the surprising mention of making tax digital for income tax self assessment (MTD for ITSA) in the Budget.

“Making Tax Digital for income tax Self Assessment – The government is committed to delivering Making Tax Digital (MTD) for income tax Self Assessment. The government will expand the rollout of MTD to those with incomes over £20,000 by the end of this Parliament, and will set out the precise timing for this at a future fiscal event.” (HM Treasury, 2024)

The thresholds and deadlines for MTD for ITSA have moved over recent years, putting doubt in some if it will ever happen. However this announcement, alongside the many mentions of digitalisation within their own systems to close the tax gap, is a strong message that MTD for ITSA will be delivered, and even expanded.

Individuals with combined trade and/or property income exceeding the following thresholds are required to use a digitally compliant software to submit quarterly returns;

• £50,000 are required to comply from April 2026,
• £30,000 are required to comply from April 2027.

We can therefore only assume that the introduction of the new £20,000 threshold will require individuals to comply from April 2028 at the earliest.  We look forward to receiving further details about the proposed additional threshold.

Ahead of the current deadlines, we would still encourage all affected individuals to onboard onto a cloud software now, which will help ensure they are digitally compliant. There are many benefits to using a cloud software, regardless of ITSA, such as:

• Anytime access to records
• Reducing paperwork
• Increasing efficiencies with clever machine learning functionality

Our experienced teams are ready to help you onboard to cloud and feel ready ahead of the deadlines.

Reference: https://assets.publishing.service.gov.uk/media/672232d010b0d582ee8c4905/Autumn_Budget_2024__web_accessible_.pdf