Making Tax Digital – pilot scheme launched

The launch of the pilot scheme for Making Tax Digital (MTD) today (April 22nd 2024) by HMRC marks a significant step in the implementation of quarterly reporting for landlords and the self-employed. This initiative, which is set to be fully introduced in April 2026, aims to modernize tax reporting processes, reduce errors, and ensure accurate tax compliance.

The pilot scheme allows tax agents to sign up, subject to having an agent services account, and is targeted at firms with clients who are self-employed or landlords with an annual income over £50,000. Participating in the pilot will involve using compatible software to keep digital records and submit quarterly updates to HMRC.

The purpose of the pilot is to enable tax agents and their clients to familiarize themselves with MTD well ahead of the mandatory implementation date. It provides an opportunity to test the new reporting system, address any challenges, and ensure readiness for full compliance.

HMRC emphasizes the importance of using compatible software for record-keeping and reporting. Self-employed individuals and landlords with total income over £50,000 will be legally required to keep digital records and send quarterly updates from April 2026, with the threshold lowering to £30,000 from April 2027.

Overall, the launch of the pilot scheme represents a proactive approach by HMRC to prepare tax agents and their clients for the upcoming changes in tax reporting. By leveraging digital technology, MTD aims to streamline processes, improve accuracy, and facilitate better tax management for self-employed individuals and landlords.

A spokesperson for HMRC said: ‘Taking part in testing is a good opportunity to familiarise yourself and a small number of your clients with MTD for ITSA well ahead of 2026. This will help you to prepare your business and be ready to support the rest of your clients.’

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1 Comment

  1. David Price

    Welcome to the new bureaucratic era.

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