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Making Tax Digital Simplification

February 5, 2024

A dramatic simplification of the MTD process is to be introduced in 2026 including no EOPS; cumulative submissions each quarter; and restrictions for complex situations.

Taxpayers with turnover over £50,000 will be brought into MTD ITSA from April 2026. The £50,000 threshold applies to gross total self-employment and property income, we need to include all of your self-employment and property income sources when determining whether MTD ITSA will apply to you.

Taxpayers with turnover over £30,000 will be brought into MTD ISTSA from April 2027.

HMRC has confirmed that self-employed taxpayers and landlords with turnover under £30,000 will not be brought into MTD ITSA in April 2027. This decision will be kept under review and affected taxpayers may be brought into MTD ITSA at some point in the future.

To simplify year-end reporting, the requirement for taxpayers to file an end of period statement (EOPS) in addition to the final declaration has been removed. The EOPS will instead be built into the final declaration process, which pulls together the information that would have been reported on the EOPS as well as other data to calculate the final tax position.

New MTD ITSA exemptions have been announced for foster carers and those unable to get a national insurance number.

Quarterly updates produced under MTD ITSA will be cumulative. This means that any errors in previous quarterly submissions can be corrected in the next quarter, rather than having to go back and resubmit earlier reports.

Finally, the expansion of the cash basis for calculating taxable profits should result in simpler reporting for MTD purposes.

Erin is writing to all our self assessment clients that aren’t already on software, we have a plan to fulfil the MTD requirements before April 2026.

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