Making tax digital for income tax has been delayed until April 2026. This effects all self-employed individuals, landlords and partnerships.
Making tax digital is a HMRC initiative, which requires businesses to use software to maintain their record of income and expenses.
The most popular software providers on the market are Excel, Quickbooks, Sage and Xero.
From April 2024, all self-employed individuals and landlords were required to keep their records digitally.
The compliant software would produce earnings reports, which would be filed to HMRC each quarter.
The only exemption was if the business income was less than £10,000 or for those digitally excluded.
Has HMRC delayed making tax digital for self-employed and landlords?
Yes. HMRC have postponed all making tax digital requirements for individuals until April 2026.
This is now the fifth delay to making tax digital for income tax. The original planned implementation date was 2018.
What will happen with making tax digital from April 2026?
Making tax digital for self-employed and landlords has been delayed until April 2026.
From April 2026, all self-employed and landlords with income in excess of £50,000 will be required to keep records digitally. This is a much higher threshold than the original income of £10,000.
It is expected to affect 700,000 taxpayers.
From April 2027, the making tax digital income threshold will reduce from £50,000 down to £30,000.
All self-employed taxpayers and landlords with income in excess of £30,000 will be required to keep records digitally.
This is expected to affect a further 900,000 taxpayers.
There is currently no date set for those businesses with income under £30,000.
This has been delayed indefinitely but is under review.
You can read the full Government Announcement here- https://www.gov.uk/government/news/government-announces-phased-mandation-of-making-tax-digital-for-itsa