Plans to introduce Making Tax Digital for the self-employed and those filing self-assessment have been pushed back two years.
And the threshold for those who must file their accounts digitally from April 2026 has risen from £10,000 to £30,000.
Under the plans, sole traders earning more than £50,000 will start filing through Making Tax Digital (MTD) from April 2026. Those earning £30,000 from self-employment, including landlords, will not need to register until the following April.
Those earning less than £30,000 a year will not have to file through MTD for the foreseeable future.
The Making Tax Digital for Income Tax Self Assessment (ITSA) scheme was due to be introduced by HMRC next April after being pushed back from April 2023. At the moment, only businesses that are registered for VAT – those earning more than £85,000 annually – need to register for MTD.
Why has MTD been delayed?
Making Tax Digital for the self-employed is meant to make life easier as filing takes place digitally and can be done in real time. But business groups have lobbied the government because it means extra costs for the self-employed.
Most MTD registered software means sole traders will be paying monthly subscription fees. And monthly costs for accountants would also need to increase.
HMRC says in the current economic situation, they do not want to add cost burdens and uncertainty for the self-employed.
Also, HMRC has some internal IT system problems, which isn’t helping. There is also concern that many micro businesses have not been given enough information about MTD for ITSA.
Recent research found that 50% of small businesses reported that they were unaware of what they would need to do. There were also worries from business leaders when only four sole trader businesses signed up to take part in MTD for ITSA trials!
What is the new timeline?
Providing HMRC doesn’t push back the dates again nearer the time, these are the key dates you need to know:
- April 2026: Making Tax Digital for Income Tax Self Assessment is introduced for businesses, the self-employed and landlords with income over £50,000.
- April 2027: MTD for ITSA is introduced for businesses, the self-employed and landlords with income over £30,000.
- Not yet scheduled: MTD for ITSA for those with income under £30,000. MTD for ITSA for general partnerships.
I’m uncertain about accounting software
Those who are registered self assessment will eventually need to choose accounting software. We recommend Xero, but if you would like to talk to us about MTD for ITSA, then don’t hesitate to contact us by filling in the form below.
