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  • Mr Paul Clifton

Making Tax Digital for Self-Assessment (MTD) Autumn Statement 2023 changes

The Public Accounts Committee reported grave concerns over Making Tax Digital for Self-Assessment (MTD for ITSA) with spiralling costs, design flaws, missed deadlines and making MTD easier for taxpayers.

After working on MTD for ITSA for 7 years, HMRC has spent £640 million. The PAC is concerned that the final cost of the MTD programme could be around £1.3 billion. There are still many questions remain about how MTD for ITSA will work. Furthermore, HMRC have not been open enough about the substantial costs that MTD will impose on many taxpayers.

MTD for ITSA is still now targeted to start in April 2026. There will be a public beta testing programme set to start in April 2025 on a voluntary early adoption basis.

The following the Autumn Statement 2023 there were some small changes announced to the proposed rules:

Quarterly updates can be submitted on a cumulative total basis showing the income and expenses accumulated during the tax year to date. This will be instead of submitting discrete quarterly totals for the transactions in each quarter covered within the update. This will remove the burden on individuals of having to resubmit a previous quarterly update where corrections were made to previously submitted quarterly amounts.

Removing the requirement for an End of Period statements (EOPS). It was though that EOPS were considered confusing for users and could lead to duplication of submission and accounts data.

Individuals will have a facility to be represented by more than one tax accountant / tax agent for MTD for ITSA purposes. This would allow quarterly updates to be submitted by different agents e.g. once for the quarterly updates and another for completing the end-of-year ‘Tax Return’ processes and the final declaration.

Individuals who cannot obtain a NINO e.g. overseas landlords are to be exempt from MTD for ITSA.

Landlords with jointly owned properties are to be given the option to:

  • Not submit quarterly updates of their expenses that relate to jointly owned properties. This is to help reduce in-year administration. However, these costs will still need to be submitted before individuals finalise their year-end tax position.

  • Keep less detailed digital records for their jointly owned properties.

HMRC is still consulting and considering whether MTD for Income Tax Self-Assessment (ITSA) is the right strategic approach for sole traders and partnerships who have trading and property businesses income under £30,000. Those with gross income below £30,000 will not be mandated into MTD ITSA.

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