Hidden MTD news in Spring Statement documents
Chancellor Rachel Reeves kept her pledge that there would be no more tax rises at the Spring Statement, but there are some important Making Tax Digital developments hidden away in the tax related documents. What do you need to know?
The timetable for Making Tax Digital for Income Tax Self-Assessment (MTD ITSA) includes mandating sole traders and landlords with revenue exceeding £50,000 from April 2026, then £30,000 the following year. The government has published a technical note alongside the Spring Statement documents that provide further details on the measures. The note includes the following key points:
- The mandation threshold will fall to £20,000 from April 2028 for sole traders and landlords;
- Exempting certain taxpayers from MTD, including non-UK resident entertainers and sportspeople with no other income sources;
- Deferring mandation from ministers of religion, Lloyds underwriters, and recipients of the married couples’ allowance (note that this is not the same as the marriage allowance, and is only relevant where one of the couple was born before 6 April 1935) and blind persons’ allowance until after the end of the current parliament;
- Confirmation that eligible software will be mandatory – there will be no filing service provided by HMRC for the end of year confirmation.
There is still no certainty of if and/or when taxpayers with income below £20,000 will be brought within MTD ITSA. The note simply says “As part of the ongoing rollout of MTD, the government will continue to explore how we can best bring the benefits of digitalisation to a greater proportion of the 4 million sole traders and landlords who have income below the £20,000 threshold.”
Related Topics
-
Should you use simplified expenses?
The flat rate expense you can claim for business journeys if you’re self-employed has increased to 55p per mile. Can you use simplified expenses for motoring costs and is it more tax efficient to do so?
-
HMRC targets smaller tax debts
HMRC is stepping up collection of lower‑value tax debts, signalling a firmer approach to long‑overdue liabilities while encouraging earlier engagement. Direct recovery from bank and building society accounts has been re‑introduced on a trial basis, alongside a government consultation on HMRC powers and tax administration. What are the key points to be aware of?
-
New digital process for NI refunds
HMRC has introduced an online service to claim a refund of Class 1 NI contributions but not everyone can use it. What can you do if you've paid too much NI?