Staff Reporter
By Emilia Carvell
Following an announcement made by HMRC, it has been confirmed that the mandation of Making Tax Digital for Income Tax (MTD) has been pushed back to April 2024.
Why has HMRC been delayed?
Whilst there is no single answer to this question, we can shed some light on the reason for the decision, and the factors that have led to the delay.
One of the biggest factors is pressure from accountants and accounting bodies. The accounting industry is understandably concerned about change from one annual tax return submission, to quarterly submissions – because whilst you may only have to submit for a single business, some accountancy practises may be looking at thousands of clients, with multiple self employments (not to mention property income!).
Some accountants are predicting that MTD will require 30% more effort or input per client, and so have requested a longer lead time to prepare their clients, and their practice.
The government have also stated that by pushing back the roll out date for MTD will better support businesses emerging from the pandemic – in a statement from Lucy Frazer, Finance Secretary to the Treasury wrote: “The Government recognises the challenges faced by many UK businesses and their representatives as the country emerges from the pandemic over the last year. In recognition of this and of stakeholder feedback, we will now be introducing MTD for ITSA a year later, in the tax year beginning in April 2024”
So, what does this mean for you?
To be honest, probably not much! Existing Olive Press readers will already know that we think preparation is key, and that hasn’t changed – but now you just have even more time to prepare!
The purpose and functionality of MTD hasn’t changed – from April 2024 you will still be required to keep records digitally and submit quarterly updates for your property income & self employment. You will still be required to submit your annual Self-Assessment Tax Return for tax years prior to April 2024.
The new penalty system that we wrote about in our previous article still stands but will now come into effect from April 2024.
Are there any benefits to the delay?
As much as it pains us to say, there absolutely is! Although we at APARI are super passionate about all things MTD, we are also completely aware that it is a big change for a huge number of taxpayers!
By pushing back the start date of MTD ITSA to 2024, it means that the pilot scheme can be extended, ensuring that MTD is tried and tested by even more volunteers prior to mandation – any issues or setbacks should be addressed and fixed by HMRC during this time, meaning that the transition from SA100 to MTD should be as smooth as possible!
It also gives taxpayers longer to get to grips with digital record keeping, and MTD ready software like APARI – if you sign up for free today, then by 2024 you’ll be a digital record keeping expert!
What’s the APARI verdict?
APARI is already MTD ready, so we would of course have been thrilled for MTD to start from April 2023! However we are aiming to use this time to become even better for our users, and work towards making tax doable!
For all the latest information, join the APARI Community at www.apari-digital.com.
READ MORE:
- Never standing still: APARI 2.0 launched to help you with HMRC tax declarations
- Taxing stuff
- Death of the Tax Return: UK tax is going digital
