The announcement that Making Tax Digital for income tax is delayed to 2024, the hike in national insurance and how a devolved corporation tax rate for Northern Ireland is favoured by members all feature in this month’s UK tax developments.

Last month the UK government announced that Making Tax Digital (MTD) for income tax self-assessment (ITSA) is being delayed one year from April 2023 until April 2024. Basis period reform is also delayed one year, and transitional measures will not now commence until April 2023 at the earliest. Both of these delays are in recognition of the challenges faced by many UK businesses as the country emerges from the pandemic. Chartered Accountants Ireland wrote at the end of August to HM Treasury calling for basis period reform and MTD for ITSA to each be delayed at least one year – the Institute’s input into the Government’s decision to defer these measures is acknowledged in a letter from the new Financial Secretary to the Treasury, the RT Hon. Lucy Frazer who also made a statement in Parliament confirming the decision.

The delay to both of these measures is welcomed and demonstrates that the Government has listened to the recommendations of this Institute and other stakeholders.

As a result of the delay to MTD for ITSA, general partnerships will not be required to join MTD for ITSA until April 2025. The date at which all other types of partnerships will be required to join will be confirmed later.

In addition, changes to the basis period rules will not come into effect before 2023/24. This was also a recommendation of the Institute in its response to the basis period reform consultation, which you can read in the Source Material section of this tax.point issue. The Government’s response to that consultation will be published in due course.

At Spring Budget, the Government announced a new system of penalties for late filing and payment of tax for ITSA. This will now be introduced for MTD for ITSA mandated taxpayers in April 2024 and for all other ITSA taxpayers in April 2025.

A news release covering last month’s announcement is also available on GOV.UK. HMRC has also updated a number of relevant publications.