HMRC launches extended MTD ITSA pilot

Following the delay in the mandation of MTD ITSA to April 2026 (for self-employed taxpayers and landlords who have income above £50,000) and April 2027 (for self-employed taxpayers and landlords who have income above £30,000), HMRC is looking to extend the scope of its pilot to include a wider range of taxpayers.

On 22 April 2024, HMRC launched the next stage in the private beta phase. This new phase will enable a larger (but still restricted) pool of self-employed taxpayers and landlords to take part in testing HMRC’s systems, as well as their own readiness for MTD ITSA.

Following this, the testing will enter the public beta phase, enabling full testing to take place ahead of its mandation in April 2026.

Who can volunteer in the 2024/25 tax year?

HMRC has confirmed that the pilot will only be open to taxpayers who are a UK resident, have a National Insurance number and have submitted at least one tax return under self-assessment. It will also be necessary for taxpayers to have no outstanding tax liabilities and for the taxpayer’s personal details to be up to date.

Although it will be open to a wide range of taxpayers, those who have a High Income Child Benefit Charge will unfortunately not be able to take part. It’s also still unavailable to those who hold a payment plan with HMRC; are a partner in a partnership; claim Married Couple’s Allowance; claim Blind Person’s Allowance; are currently, or are going to be, bankrupt or insolvent; are an MP, minister of religion or Lloyds underwriter; have income from being a foster carer or gain income from being in a shared lives scheme; have income from a trust; have income from a jointly owned property; have income from a furnished holiday let; are subject to a compliance enquiry; use farmers' averaging relief or averaging for creators of literary or artistic works; or are signing up on behalf of someone else (unless an agent).

Private beta will also be unavailable for those who wish to carry back losses, change their accounting period or change their accounting method.

Previously, the pilot was only open to taxpayers with 5 April accounting year ends. However, it is now possible for taxpayers with a 31 March accounting year ends to take part, as long as the chosen software package can support this. Taxpayers with other accounting year ends are unable to take part.

Registering clients for private beta

HMRC is asking for agents to register their clients for private beta, which is possible provided they are registered for HMRC’s agent services account (ASA). You can find details of how to create an agent services account on GOV.UK. It’s worth noting that it will be necessary to complete a digital handshake so that the client can authorise an agent to act on their behalf in this way.

HMRC has some agent specific guidance on the process and the information needed for agents to register their clients for private beta testing. It is possible for taxpayers to sign up themselves up for this – there is separate guidance on the process to be followed in that case.

Is my software compatible with private beta?

At this stage, five software providers are taking part in private beta. A further 21 providers are in the process of developing their software in order to take part in this phase. We expect that more software providers will be able to facilitate private beta in the coming months.