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In light of the current financial strain felt by many small businesses, the treasury has announced that the planned launch of Making Tax Digital for Income Tax (MTD ITSA) will now be postponed for two more years, until 2026.
The announcement came after professional bodies called the government to allow sole traders, landlords and other small businesses additional time to adjust their internal processes to the new MTD scheme.
The treasury has also introduced new minimum thresholds for reporting your income via the MTD for ITSA scheme.
· Until 2026,the minimum reporting level will increase to £50,000.
· Sole traders or individual landlords with an annual income of more than £50,000 will be-required to join the scheme and submit their annual tax return digitally.
· From 2027, businesses with annual earnings of more than £30,000 will be required to join the scheme as well.
· The scheme will be reviewed to see if it can be made more suitable for the specific needs of sole traders and landlords, with annual earnings of less than £30,000.
With accordance to the scheme's new guidelines, MTD for ITSA points-based penalty system will be extended as well.
Even though MTD for Income Tax (MTD ITSA) is getting delayed, in reality, it has a real potential for helping businesses getting more efficient when it comes to tax return submissions. So in that respect, reporting your taxes with a good, digitally integrated accountant is still something you should consider.
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