The government has accepted arguments put forward by landlords and accountancy groups, and delayed a key deadline for compulsory digital tax returns.
A statement from HM Treasury, released late yesterday afternoon, says: “Understanding that self-employed individuals and landlords are currently facing a challenging economic environment, and the transition to Making Tax Digital for Income Tax Self Assessment (ITSA) represents a significant change to taxpayers and HMRC for how self-employment and property income is reported, the government is giving a longer period to prepare for MTD.”
It continues: “The mandatory use of software is therefore being phased in from April 2026, rather than April 2024.
"From April 2026, self-employed individuals and landlords with an income of more than £50,000 will be required to keep digital records and provide quarterly updates on their income and expenditure to HMRC through MTD-compatible software.
“Those with an income of between £30,000 and £50,000 will need to do this from April 2027. Most customers will be able to join voluntarily beforehand meaning they can eliminate common errors and save time managing their tax affairs.”
Victoria Atkins, Financial Secretary to the Treasury, says: “It is right to take the time to work together to maximise the benefits of Making Tax Digital for small businesses by implementing the change gradually. It is important to ensure this works for everyone: taxpayers, tax agents, software developers, as well as HMRC.”
And Jim Harra, Chief Executive and First Permanent Secretary, HM Revenue and Customs, adds: “HMRC remains committed to the delivery of Making Tax Digital as a critical part of our strategy for digitalising and modernising the tax system, but we want to make sure we get this right and deliver it effectively.
“A phased approach to mandating MTD for Income Tax will allow us to work together with our partners to make sure that our self-employed and landlord customers can make the most of the opportunities this will bring.
“The announcement relates to MTD for ITSA only. Making Tax Digital for VAT has already been implemented and is demonstrating the benefits to businesses and the tax system of digital ways of working.”
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YESSSS!!! Some good news at last!!
It is good news; I was worried that I wouldn't be able to do it.
That's great news, and at present myself and my wife each come in at just under 50k so that could be April 27 for us,
Great news, hopefully we will be able to sell up before then
Maybe some of us will be dead by then so no need to jump thro another Gov hoop..if I had my life again I would never become a private owner who lets houses or flats to people who need them..its just too much hassle and grief
Excellent, hopefully I’ll be dead by then
Leave the next generation to sort out the sh*t show that’s coming
No you won't George, old dogs like us just go on and on to spite everyone
"Making Tax Digital for VAT has already been implemented and is demonstrating the benefits to businesses"
Rubbish!
I have been suffering MTD for VAT (for my computer company) for some while now. It has made things more difficult for me, and has not benefited me in any way at all. Plus I have to pay an annual licence fee to use the software needed to do this.
It would be nice if the truth were told, and I wish Jim Harra would read this.
One of the main things I disagree with is the fact I will have to buy software to submit the return. When I was self employed I was under the VAT simplified scheme, all I had to do was go on the Gov web site insert no more than half a dozen numbers that I lifted from a spreadsheet. Surely for the majority of small time landlords all they need is rent received in quarter, allowable costs per quarter and interest on mortgage per quarter. This could be done direct to their web site without subscribing to third party software. At least now it would appear that they have upped the turnover requirements. If they bought it in on turnover exceeding £10,000 what would that be worth per quarter to them by the time allowable costs have been deducted, peanuts.
I was VAT registered for 30 yrs but as luck would have it I was out of that business before MTD for VAT came in
It’s all a ruse to help Xero and Quickbooks make massive profits whilst causing major headaches for us. I don’t pay monthly for my bookkeeping software presently, one off payment of £29.95 about 20 years ago and it does the job well. It’s no longer supported by Microsoft (MS Money…so easy to use). Much easier than the other two I mentioned before. And…no ongoing costs.
The monthly costs of accountancy software is an issue for small landlords as they really dont have the need for complex accountancy packages for one property rental. What I would like to see developed is a MTD that allows for multiple inputs so an agent can provide the service for their landlords.
I agree there should be free software or some easy to use interface on HMRC where the figures can be entered. Are the figures quoted for gross income (ie total rental income before any allowable expenses) or after we have taken off expenses and mortgage interest?
If you go to gov.uk > VAT > Find software that's compatible with Making Tax Digital for VAT
Tick the free version box on the left. There is then a list of 24 approved software.
#1 ANNA free VAT filer
#ABC VAT Bridge
#GoFile
#My Digital Bridge
100PcVatFreeBridge
Adminsoft Ltd
Bokio
Brightbook
BusinessGT
Bx
Cirrostratus Exedra
Countingup
Cuimake MTD for Ecommerce
Easy MTD VAT
Federation of Small Businesses MTD
FreeAgent
MTDsorted
Open Answers - My Tax Digital (Free)
Open Answers Limited (Portico Free)
PWC spreadsheet
QuickFile
SafeAccounts
VATIFY
Zoho
There are, but very few are aimed at landlords. Those that are will only allow a miniscule number of tenancies. Most struggle with joint ownership or other income streams.
Are any of the software packages compatible with a smart phone?
We don't have a PC anymore, it died years ago (MS stoped supporting the software),I can do most things from my phone or work laptop - my employers don't allow 3rd party software on it.
Are the tax office expecting us to buy a laptop to use once a qtr also?
We can buy a laptop but that’s all we can do with it.
So can’t be anything to improve housing or we’d know it back the front.
I would like to see them do our work they are so full of themselves.
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