Measure
Following its review of smaller businesses, the government has confirmed that those under the £30,000 turnover threshold will remain outside MTD for the time being. The timetable for mandation for larger businesses has also been confirmed and some simplification measures announced.
The government has been undertaking a review of small businesses (those with turnover up to £30,000 a year) to confirm whether they should be subject to MTD for ITSA and has concluded they should not be mandated into the regime at present. Their position will be kept under review. The government has also decided to exempt individuals who are unable to obtain national insurance numbers.
The review has also concluded that improvements can be made to the required quarterly reporting, such as each three-monthly update reporting cumulative figures for the tax year concerned, rather than standalone figures for the quarter. The requirement for the taxpayer to file End of Period Statements (EOPS) each quarter is also being removed. Work continues on other measures, including how current systems may be amended to allow taxpayers to authorise more than one agent for MTD.
Self-employed individuals and landlords all have income that could potentially fall within the MTD regime.
Those with annual income over £50,000 will be mandated to join MTD from April 2026, followed by those with income over £30,000 from April 2027. The date for partnerships to be mandated into MTD has yet to be determined, but the government has confirmed it remains committed to the future introduction of MTD for ITSA to partnerships as part of its tax administration strategy.
Given the challenges posed by MTD, the decision to maintain the current threshold at more than £30,000 of income is very welcome. The proposed easements will also simplify matters for those mandated to use MTD, and the recognition that further work is needed, especially around the process for agent authorisation, is encouraging.