UK digital income tax overhaul delayed for two more years The Treasury announced on Monday that compulsory use of HMRC’s Making Tax Digital (MTD) scheme for Income Tax Self-Assessment (ITSA) will be delayed by two years to April 2026. It had already been postponed from next year to April 2024 because the technology was not ready. “A phased approach to mandating MTD for Income Tax will allow us to work together with our partners to make sure that our self-employed and landlord customers can make the most of the opportunities this will bring,” HMRC chief Jim Harra said. The Government also changed the annual income threshold for MTD to £50,000 from April 2026, up from its initial proposal of £10,000, because of fears that the lower limit would impose too great a burden on small businesses. The threshold will be reduced to £30,000 from April 2027. Many self emloyed individuals will get caught under the new rules and will see a significant increase in their accounting costs because the new system will replace the current annual tax return with six separate returns. Alison Hobbs, chair of the digital strategy committee of the Chartered Institute of Taxation and the Association of Taxation Technicians, said the delay “had to happen” owing to “incredibly limited testing” of MTD and the “significant problems still to be resolved”. Elsewhere, Caroline Miskin, ICAEW senior technical manager, Digital Taxation, said that the delay “is the right move” but stressed that “fundamental changes to the policy and design of MTD” is needed.