Millions of self‑employed workers and landlords are bracing for a seismic shake‑up of Britain’s tax system from April 6.

The move comes as HMRC forces a wholesale digital overhaul of Self Assessment that accountants warn could heap on more admin, more costs – and more penalties unless they get ready now. Under the government’s Making Tax Digital for Income Tax (MTD) programme – the biggest change to Self Assessment in decades – sole traders, freelancers and landlords with combined income above £50,000 will be dragged out of the old paper system and dumped into quarterly digital reporting.

In plain English the changes mean there will be no more annual tax return by itself. Instead the target groups must keep records on approved software throughout the year.

And every three months they will have to send a digital update to HMRC showing their income and expenses.

That means four compulsory submissions – and then a final annual declaration – every year.

Accountants sound alarm bell

Industry insiders are already warning of a cost explosion. A recent survey suggested that more than 200,000 landlords and sole traders who previously filed their own tax returns could end up paying 5‑10% for accountants’ services as demand for help with the new regime surges.

Even worse: while HMRC has delayed formal penalties for missed quarterly updates until April 2027, anyone who repeatedly fails to hit deadlines after that could collect penalty points – and a £200 fine once four points accumulat

Small business owners confused – and unprepared

Despite countless warnings, a significant number of self‑employed Brits have yet to switch to digital software – with many still relying on spreadsheets, paper or last‑minute scrambling.

Experts say the rule change doesn’t just hit the well‑heeled either. In 2027 the income threshold drops to £30,000 and then to £20,000 in 2028 – meaning millions more people will be rolled into the system.

The taxman argues that the changes will help taxpayers avoid mistakes and make running a business easier by spreading the workload across the year. HMRC says the move to digital records and quarterly updates will “provide clearer real‑time insight into tax affairs” and reduce the risk of errors.

Taryn Lee Johnston, owner at Lincoln-based The FCM Group, told Newspage: “For many self-employed people, this is another administrative weight on an already heavy load. Many will either pay accountants more or spend extra hours on compliance instead of growing their businesses. The pace and scale of the burden is the real problem.”

Gwion Thomas, founder of LITT, the freelancer accounting app, said: “Making Tax Digital is a landmark shift, moving millions to digital record-keeping and quarterly reporting. Get ready now – don’t leave it to a last-minute scramble.”

Steven Greenall, mortgage advisor at Protect & Lend, said early planning is essential: “It will feel onerous at first, but those who prepare and set up the right systems will find the transition much more manageable.”

Colette Mason, AI consultant at Clever Clogs AI, warned about the scale: “Over two million people will be affected by 2028. Even small side-hustles could face eight or more filings a year. The compliance burden risks outweighing any tax recovered.”

Patricia Ogunfeibo, founder at tenant2owner, highlighted penalties: “Miss a deadline and penalty points hit fast. Add late payment interest, and the costs stack up. Without a process in place, even illness or accidents could trigger fines.”

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