While most individuals and business owners will be aware of the Government’s strategy to move tax reporting online, it’s important to know which changes are coming, and how they may affect you – especially when some of the original deadlines have been delayed.
Making Tax Digital (MTD) is part of the UK Government’s overall plan to fully digitise the tax system.
Under the new rules, those filling in their Income Tax Self-Assessment (ITSA) will need to keep a digital record of their earnings and provide quarterly updates.
Originally planned to be rolled out on 6 April 2024, the deadline for digital tax reporting for ITSA, has now been delayed to 6 April 2026.
This is to allow individuals and small businesses additional further time to make the changes needed.
Additionally, not all businesses will need to make the change straight away. In the first year of the new rules (2026), only unincorporated businesses, landlords, and self-employed with property and/or business income of more than £50,000 will have to report taxes digitally.
In the following year, (2027), those earning more than £30,000 will be required to join.
Following this, a review of Making Tax Digital will be undertaken to look at how it can be applied for those who earn under £30,000 and general partnerships.
Penalty System Changes
There will also be changes to the penalty system for late payments. The new system is points-based.
A point will be added for each late payment. For those issuing ITSA quarterly, they will need to notch up four points, before a fine is issued. The penalty for this will be a fine of £200.
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Making Tax Digital- Income Tax Self-Assessment – Key Dates
6 April 2026 – Businesses and self-employed individuals earning more than £50,000 will be required to file their Income Tax Self-Assessment digitally.
6 April 2027 – Businesses and self-employed individuals earning more than £30,000 will be required to file their Income Tax Self-Assessment digitally.
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