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Draft MTD ITSA Regulations 2021

Making Tax Digital for Income Tax Self-Assessment – policy update

Making Tax Digital (MTD) is making significant progress to realise HMRC’s vision to become a modern digital system, which works closer to real time, making it easier for customers to pay the right tax. Since April 2019 over 1.4 million VAT customers above the VAT threshold (£85,000) have joined MTD (including over 300,000 businesses under the threshold joining voluntarily) and we are making good progress to deliver on bringing in the remaining VAT population in April 2022.

We are also making significant progress with preparations to extend MTD to income tax self-assessment (ITSA) customers from April 2023.

All ITSA customers earning more than £10,000 business and property income per year are required to join MTD from April 2023 with the following exceptions:

  • Trusts, estates, trustees of registered pension schemes and non-resident companies will not be required to join MTD for ITSA
  • General partnerships (as defined by the Partnership Act 1890) that earn more than £10,000 per year and have only individuals as partners are required to join MTD for ITSA from April 2023. All other partnerships are not required to join MTD for ITSA in April 2023 (examples include those that have corporate partners, Limited Partnerships or Limited Liability Partnerships) but will be required to join MTD for ITSA at a future date to be confirmed

We are sharing early draft ITSA Regulations which sets out our policy position in legislation – see below. Software companies may find it helpful to use these draft Regulations when developing software products for ITSA customers joining the MTD ITSA pilot in April 2021 onwards.

Download the early draft MTD ITSA Regulations 2021