Making Tax Digital – the next step

The mandatory rollout of Making Tax Digital (MTD) for Income Tax is set to begin in April 2026. MTD for ITSA will bring substantial changes to how businesses, self-employed individuals, and landlords interact with HMRC. The system will require them to register, file, pay, and update their details through an online tax account.

To prepare for the launch of MTD for Income Tax in April 2026, it is essential to start considering the use of accounting software that is compatible with sending updates to HMRC.

You will need to use MTD for Income Tax from 6 April 2026 if all of the following apply, you:

are an individual registered for self-assessment;
get income from self-employment or property, or both, before 6 April 2025; or
have a qualifying income of more than £50,000 in the 2024 to 2025 tax year.

MTD for Income Tax will then be extended to those with an income between £30,000 and £50,000 from 6 April 2027.

It was announced as part of the Budget measures that MTD for Income Tax will be extended to sole traders and landlords with income over £20,000 by the end of the current Parliament. The precise timing of this change has yet to be confirmed.

Source: HM Revenue & Customs | 18-11-2024

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