Making Tax Digital (MTD) Updates – What You Need to Know📅 Published: April 2025
The UK government is continuing the rollout of Making Tax Digital (MTD) for Income Tax, a major change in the way self-employed individuals and landlords report their income to HMRC.
From April 2026, many taxpayers will be required to keep digital records and send quarterly updates using HMRC-compatible software. The rules are being introduced gradually, depending on your level of income.
Who Will Be Affected and When?
From 6 April 2026: Self-employed individuals and landlords with qualifying income over £50,000 must join MTD.
From 6 April 2027: Self-employed individuals and landlords with qualifying income over £30,000 must join.
From 6 April 2028: The threshold is expected to reduce further to £20,000 qualifying income.
👉 Qualifying income means the total gross income you receive from self-employment and property, before expenses.
What You Will Need to Do
Keep digital records of your self-employment and property income/expenses.
Submit quarterly updates to HMRC using compatible accounting software.
Finalise your tax position at the end of the year with a final declaration.
This means that instead of submitting just one Self Assessment return each year, you will need to send updates every three months, plus one final submission at year-end.
Why Is This Important?
The aim of MTD is to make the tax system more accurate and efficient, reducing the risk of errors. However, it also means a significant change for taxpayers who are used to the traditional annual Self Assessment process.
Business owners should prepare early by:
Reviewing which accounting software they will use.
Making sure they understand their qualifying income.
Speaking with a professional accountant to plan ahead.
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