Government delays MTD for income tax and basis period reform
Following vocal representation from various professional bodies, the government has agreed to delay crucial reforms to the tax system. What’s the full story?
On 23 September 2021 the secondary legislation for implementing Making Tax Digital for Income Tax Self-Assessment (MTD ITSA) was published. The new regulations confirm that MTD ITSA will be implemented for self-employed trading income and property income. However, the implementation date will now be 6 April 2024 rather than 2023. All sole trade businesses and landlords will come within MTD ITSA from that date. General partnerships will follow twelve months later, with other types of partnership in subsequent years yet to be confirmed. The new penalty system that was due to be introduced alongside MTD ITSA will also be pushed back to 2024.
Further welcome news came via a ministerial statement concerning basis period reform. The statement says that the reform will now not take place until April 2024 at the earliest, which would mean the transition year would be in 2023/24 not 2022/23. A statement on whether the reform will be dropped completely is expected at next month’s Budget - though we currently believe this is unlikely.
Related Topics
-
How much will you save with reduced scale charges?
HMRC has reduced the VAT fuel scale charge by nearly 6% for company-provided cars. When does the new reduced rate take effect and how do you make the calculations?
-
Avoid the trading allowance trap
In late 2024 you became self-employed. You’re now completing your tax return for 2024/25 and will claim the trading allowance instead of a tax deduction for business expenses. Could this impact your NI record and state pension entitlement?
-
Time off for fertility treatment?
A survey by Fertility Matters at Work has revealed that more than one-third of employees undergoing fertility treatment have resigned or are considering resigning because of the physical and emotional toll. Is there a right to time off for fertility treatment?