HMRC has directly contacted taxpayers to notify them about the upcoming legal requirement to comply with a new regulation. Starting from next month, individuals earning over £50,000 annually will need to adhere to the fresh Making Tax Digital (MTD) requirements, set to begin in April 2026.
Furthermore, starting next year, the method of reporting income for self-employed individuals and those receiving rental income will gradually expand to encompass more individuals. As of April 2027, individuals earning above £30,000 will be mandated to follow the rules, and by 2028, it will extend to those earning more than £20,000.
HMRC emphasized that individuals receiving qualifying income from self-employment and/or property will be legally obligated to utilize Making Tax Digital (MTD) for Income Tax based on the level of qualifying income, effective from specific dates.
Starting April 2026, individuals with qualifying income exceeding £50,000 in the 2024 to 2025 tax year must adopt MTD. From April 2027, those with qualifying income surpassing £30,000 in the 2025 to 2026 tax year will be required to start using MTD. Finally, from April 2028, individuals with qualifying income above £20,000 in the 2026 to 2027 tax year will be mandated to comply with MTD, pending approval of the legislation by the Government to lower the qualifying income threshold to this level.
HMRC outlined that taxpayers, along with their agents if applicable, must utilize software compatible with Making Tax Digital for Income Tax to manage digital records of self-employment and property income and expenses, submit quarterly updates to HMRC, and file a tax return along with payment by January 31 of the following year.
In preparation for MTD, businesses are encouraged to attend a webinar offered by HMRC covering requirements, preparation steps, software selection, and more. Interested parties can register to attend via the provided link.
For landlords and joint property owners, there is a separate webinar explaining how MTD will operate, with a registration link available.
Additionally, sole traders or landlords without professional assistance can attend a webinar specifically designed to guide them through the preparation process. Registration for this webinar is accessible via the provided link.