Milsted Langdon warns firms not to halt their Making Tax Digital preparations, despite another delay

January 9, 2023
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Businesses are being encouraged by regional accountancy firm Milsted Langdon to carry on preparing for Making Tax Digital (MTD) for Income Tax in spite of the announcement of a two-year delay.

Milsted Langdon, which has five offices – including one in Bristol – said the further changes to the much-delayed MTD initiative by HM Revenue & Customs (HMRC) should not stand in the way of firms’ preparations. 

The delayed implementation of MTD for Income Tax Self-Assessment (ITSA) means it will now be phased in from April 2026 for a smaller number of businesses, self-employed individuals and landlords rather than the original launch date of April 2024.

From the new start date, instead of MTD for ITSA applying to all self-employed workers and landlords with property and/or business income of more than £10,000, it will now only apply to those with income exceeding £50,000.

As per the original plan, they will have 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 also need to comply with this from April 2027.

The government has also confirmed that it will not extend MTD for ITSA to general partnerships in 2025, but that it remains committed to introducing it to partnerships at a later date.

Milsted Langdon audit and general practice partner Sarah Jenkins, pictured, said: “There are likely to be many taxpayers out there who will welcome this delay, and while it will help those struggling to carry out change, it shouldn’t reduce the need to prepare.

“While 2026 may seem like a long way away, we have learned from the first stage of MTD for VAT that it often takes several years for businesses to introduce the systems and procedures required to comply with MTD.

“I understand that there might be a temptation to take the foot off the gas, but those likely to be affected by these changes should be looking at integrating MTD-compliant software into their operations now.”

Sarah added that many cloud-accounting platforms offered benefits beyond compliance with the new rules, thanks to the automation they provide, which can help sole traders and landlords save time and gain access to better business intelligence.

Milsted Langdon offers a wide range of business services – from routine compliance matters to specialist tax advice and planning, corporate finance, business intelligence, insolvency, forensic accounting and mediation services – across its office network, which also includes Bath, Taunton, Yeovil and London.

 

 

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