The Northern Ireland Tax Committee chaired by Janette Burns met recently for the first time in 2025. A range of issues was on the agenda including Making Tax Digital (MTD) for income tax which commences in just over a year from April 2026 for unincorporated businesses and landlords with turnover from self-employment and property income exceeding £50,000 in 2024/25. The meeting was attended by several HMRC MTD Programme representatives, including the Programme Director Craig Ogilvie, who gave an update on the current status of this project whilst also reflecting on its challenges. Craig also set out what HMRC’s ambitions are for the next phase of testing in 2025/26, including the supports which will be available to taxpayers and agents.
HMRC will be writing to agents who are likely to have clients in the first phase of mandation in the coming months; just one element of a wider comms plan. HMRC is keen to hear about the plans of our member firms to get ready for this major change and, in particular, specifically the reasons why firms are not planning to take part in testing in 2025/26 and what the challenges/blockers are preventing participation. Email tax@charteredaccountants.ie to provide your feedback. The Institute continues to work with HMRC on MTD readiness and is developing a cross-department MTD readiness strategy to assist members in their preparations.
Last week HMRC held an MTD event in Belfast on Tuesday 4 March which the Institute was represented at. Another event is to be held in Belfast later in 2025 which we will share details of once available. HMRC’s MTD team, including the Programme Director also presented at the Institute’s Practice Consulting team’s Practice News webinar at the start of February.
On the guidance front, HMRC has published an updated version of work out your qualifying income for Making Tax Digital for Income Tax. The changes made to this guidance are as follows:
Clarified the definition of ‘qualifying income’. This is because HMRC is seeing that various taxpayer types think that other income sources are included under ‘income from self-employment’ e.g. income from a partnership or dividends from their personals service company when they are not,
Explanation of ‘latency’,
Added a new sub-section on what’s not included,
Added new sections on if you use the cash basis and are VAT registered, if the transactions in UK land rules apply, and if you are impacted by basis period reform, and
Redesigned the section on residency and removed the concept of domicile which will no longer be relevant from April 2025.
These changes align to internal HMRC feedback and policy review but are also based on user feedback from ongoing user research in support of this interactive guidance tool, linked from Find out if and when you can use MTD. The list of available MTD for income tax software has also been updated.