Possible major change to how we pay our income tax from tax year 2029

poseidon1

DRS1 said:

I have to say that I thought quarterly reporting under MTD was almost certain to lead to quarterly payment of tax.  But could it lead to quarterly changes to your tax code?  This feels like another complication to an already complicated system.

My impression was MTD (intially) was only about extracting tax from the self employed and landlords on a  more frequent basis than the current half yearly payment on account system. 

However guidance to landlords  in the article below (and all other sources related to MTD) suggest MTD is  at this stage only an additional reporting requirement, with tax still only being paid on the usual half yearly cycle so makes me wonder what's the point?

Year end self assessment returns for all non MTD income and  capital gains still necessary, so appears MTD amounts to just an extra  layer of reporting  on a quarterly basis ( at additional cost), but apparently no acceleration in the tax collected. As regards the underlying rationale behind MTD therefore, I am waiting for the other shoe to drop.

https://www.totallandlordinsurance.co.uk/knowledge-centre/what-is-making-tax-digital-mtd-a-comprehensive-guide-for-landlords#:~:text=What income is excluded?,to separate tax reporting requirements.


Given the above, clearly there is no effect on tax codes  by virtue of the MTD system at this stage. However the changes proposed from 2029 onwards to PAYE and self assessment implies  ( to me ) that MTD reporting, may interact   (in some way) with  the new PAYE adjustment proposal to capture self assessed income earlier.

Hopefully all will become clear during the consultation process next year, unless any other forum member has additional insights on MTD.