HMRC has written directly to people informing them they will be “legally required” to adhere to a new regulation, with some needing to comply from next month. Through email correspondence, the tax authority outlined that fresh Making Tax Digital (MTD) requirements commence for those earning above £50,000 annually from April 2026.

Subsequently, from next year, this updated method of declaring income for self-employed individuals, or those generating rental income, will progressively include more taxpayers. From April 2027 anyone earning above £30,000 must follow suit, with those earning more than £20,000 affected from 2028.

HMRC said: “If you receive qualifying income from self-employment and/or property, you’ll be legally required to use Making Tax Digital (MTD) for Income Tax – based on the level of qualifying income – from the following dates.”

When you need to start using Making Tax Digital

The authority proceeded to clarify that, from April‌‌‌ 2026, should your qualifying income exceed £50,000 in the 2024 to 2025 tax year, MTD usage becomes mandatory.

From April‌‌‌ 2027, should your qualifying income surpass £30,000 in the 2025 to 2026 tax year, you must begin utilising MTD.

Finally, from April‌‌‌ 2028, should your qualifying income be greater than £20,000 in the 2026 to 2027 tax year, MTD will be required, though HMRC noted this remains contingent upon Government legislation to reduce the qualifying income threshold to this level receiving approval.

What is Making Tax Digital?

HMRC outlined that taxpayers, along with their agent if applicable, will be required to utilise software compatible with Making Tax Digital for Income Tax to generate, maintain and amend digital records of self-employment and property income and expenditure, transmit quarterly updates to HMRC and file a tax return and settle tax owed by January 31 the subsequent year.

Within its correspondence, HMRC indicated that businesses could prepare for MTD by participating in a webinar. It will clarify the requirements, preparation methods, applicable rules, software selection guidance and additional information. Businesses can sign up to participate via this link.

For landlords and joint property owners, a dedicated webinar is available that will demonstrate how MTD will operate. There is also a link to register.

Lastly, for those who are a sole trader or landlord without an accountant or bookkeeper, a webinar is offered that will outline preparation steps. Register via this link.