HMRC pauses MTD for ITSA pilot

HMRC has temporarily paused the Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) pilot for newcomers.

According to a statement made to AccountingWeb, an HMRC official said the decision would allow the tax authority to refresh its testing strategy, and that they plan to keep stakeholders updated about changes to the pilot process and how to get involved.

Only 137 businesses are currently part of the pilot - down from around 500 before the Covid-19 pandemic began. The drop in participation is partly due to HMRC introducing tighter criteria for the pilot in January last year. Although these restrictions were eased slightly in July, only those businesses with a 5th April year-end could participate.

While there's currently no date set for when the pilot will reopen, a spokesperson confirmed that HMRC will build up the pilot ahead of MTD for ITSA rules coming into effect in 2026. There are also plans to expand the pilot to allow many more businesses to join as the system develops further before phased mandation begins.

Acumen's Tax Director, Fiona Ferrol, said: “This situation is ongoing and we'll continue to keep up to date with all the changes and keep affected clients informed.”

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