Making Tax Digital for Income Tax Self-Assessment
From April 2023 it is likely that all ITSA customers with a taxable turnover of £10,000 or more per year from their business or income from property, will be required to join MTD. This legislation is likely to go before Parliament early in 2021.
It is likely that the following exemptions will apply:
Trusts, estates, trustees of registered pension schemes and non-resident companies will not be required to join MTD for ITSA.
Partnerships that earn £10,000 or more and that have only individuals as partners are required to join MTD for ITSA from April 2023 but all other partnerships (e.g., those that have corporate partners and Limited Liability Partnerships) are not required to join MTD for ITSA in April 2023 but will be required to join MTD at a future date, to be confirmed.
These customers are exempt due to the complexity of delivery requirements, and as their nature and current obligations differ notably from those of sole traders, partnerships with individuals only as partners, and individual landlords.
HMRC have also just released functionality that allows software developers to build MTD for ITSA-compatible products for customers with construction industry, state benefits, employment and student loan income, and taxpayers with more than one source of self-employment and/or property income. The end-to-end MTD ITSA pilot will be expanded in scope yet further from April 2021 to enable even more businesses and landlords to join and facilitate full testing of the service in advance of testing at larger volumes in 2022-23, ahead of mandation. They are hopeful that agents and businesses who are in a position to start using MTD early and help test the service will do so.
SGF will keep members updated however should you have any questions please let us know and we can pass them on to the Making Tax Digital Team.