Autumn Budget 2024 Earn £20k plus? Quarterly and Yearly Tax Returns for All by 2029
Published / Last Updated on 08/11/2024
We are staggered that no one in the press or media appears to have picked up section 5.21 of the Treasury’s Autumn Budget 2024 paper.
“5.21 Making Tax Digital for income tax Self Assessment – The government is committed to delivering Making Tax Digital (MTD) for income tax Self Assessment. The government will expand the rollout of MTD to those with incomes over £20,000 by the end of this Parliament, and will set out the precise timing for this at a future fiscal event.”
This is massive for us all …
- “by the end of this Parliament” means before the next General Election.
- “Making Tax Digital (MTD) means the continued rollout were initially it was limited companies being required to keep electronic bookkeeping records for all transactions including submitting VAT returns and payroll using independent, HMRC approved software. The likes of QuickBooks, Xero and Sage are the leaders in this sector and there are many more.
- 2026 - MTD is already scheduled to come into force for all businesses including the self employed and landlords with qualifying income to maintain digital records and update HMRC each quarter using compatible software.
- MTD will mean filing returns every quarter (i.e., 4 X per years) plus full self assessment returns.
- For individuals, MTD for ITSA will be introduced in two phases:
- from April 2026, for those with qualifying income over £50,000.
- from April 2027, for those with qualifying income over £30,000.
It is all usually a requirement that all individuals (including employees) who are higher rate taxpayers (income above £50,271) to complete self assessment returns. Section 5.21 said “expand the rollout of MTD to those with incomes over £20,000”.
This tells us that anyone with an income over £30,000 pa above will be caught by MTD and filing quarterly returns and full income tax self assessment returns (ITSA) in 2027 and anyone with an income over £20,000 pa will have to do the same within the next 5 years (end of this Parliament).
National Living Wage (NLW) increases to £12.21 in April 2025. Allowing for CPI at 2.5% pa, this could be £13.48 per hour by 2029. By 2029, you may only need to be working part-time just over 28 hrs per week on the projected NLW £13.40 per hour to cross over the £20,000 pa threshold and be required to file quarterly income returns and a full annual self assessment return.
