Weekly tax highlights ― 27 September 2021

Produced by Tolley

The following Owner-Managed Businesses guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • Weekly tax highlights ― 27 September 2021
  • Administration
  • Making Tax Digital for income tax delayed to April 2024
  • The Income Tax (Digital Requirements) Regulations 2021, SI 2021/1076
  • HMRC guidance on identifying tax avoidance enabler penalties and when to appeal
  • Indirect taxes
  • Distance sales: HMRC guidance on the One-Stop Shop(OSS)
  • : seeds and plants that can be zero-rated
  • Consultations
  • Residential property developer tax
  • More...

Weekly tax highlights ― 27 September 2021

Administration

Making Tax Digital for income tax delayed to April 2024

The Treasury has announced a 12-month delay to the introduction of Making Tax Digital for income tax, which will now be brought in for the 2024/25 tax year. Basis period reform is also to be moved back by 12 months.

In a written statement, the Treasury has announced the following changes:

  1. Making Tax Digital for income tax self assessment (MTD for ITSA) will be introduced from 6 April 2024 ― one year later than expected

  2. general partnerships will not be required to join MTD for ITSA until 2025/26. Dates for other types of partnerships ‘will be confirmed later’

  3. the associated penalties for late filing and late payment will now be introduced for those who are mandated for MTD for ITSA in the 2024/25 tax year

  4. basis period reform is also to be delayed by 12 months, with the Treasury noting that any changes ‘will not come into effect before April 2024, with a transition year not coming into effect earlier than 2023’

The Treasury has published the Finance (No 2) Act 2017, Sections 60 and 61 and Schedule 14 (Digital Reporting and Record-Keeping) (Appointed Day) Regulations 2021, SI 2021/1079, which brings the MTD for ITSA legislation in TMA 1970, Sch A1 into force from 6 April 2024.

HMRC has also published a Tax Information and Impact Note which suggests ‘what MTD might look like in practice for businesses and individuals joining MTD in the coming years’ and offers an assessment of the potential costs and benefits of MTD for businesses, including the implications for additional accountancy / agent costs.

On basis period reform, the Government intends to set out next steps alongside its response to the consultation. HMRC’s published guidance does not appear to indicate the Government’s view on whether the basis period reform is likely to be in place before the introduction of MTD for ITSA, as suggested in recent feedback from

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