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ICAEW re-examines draft MTD for ITSA regulations

Author: Caroline Miskin

Published: 15 Jan 2021

15 January: HMRC has dusted down the draft MTD for ITSA regulations, previously consulted on in 2017, and issued a further consultation. ICAEW’s Tax Faculty has identified several areas where changes are needed before the regulations are laid before parliament.

In ICAEW Rep 07/21, the faculty focuses on the detail of the draft Making Tax Digital for Income Tax (MTD for ITSA) regulations.

Key concerns that have been discussed in depth with HMRC include:

  • Update periods and the need for these to match to accounting periods.
  • The rules around when the obligation to comply would be removed from taxpayers whose gross MTD source income falls below the £10,000 threshold.

Other comments made include:

  • The need for clarity on how the regulations apply to different types of property income: UK, furnished holiday lettings, overseas and income covered by rent a room relief.
  • Proposing that the deadline for submitting quarterly updates be one month and seven days after the period end to align with MTD for VAT.
  • The need for HMRC to have the power to vary the requirement to record every individual transaction where it would be “impossible, impractical or unduly onerous to do so”.

The faculty continues to engage with HMRC and government on major MTD for ITSA policy concerns. Further detailed engagement on tertiary legislation and the development of the functionality and associated guidance is also ongoing.

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ICAEW's Tax Faculty is recognised internationally as a leading authority and source of expertise on taxation. The faculty is the voice of tax for ICAEW, responsible for all submissions to the tax authorities. Join the Faculty for expert guidance and support enabling you to provide the best advice on tax to your clients or business.

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