HMRC has reminded certain people that a new system is now in place
Workers across the UK have been advised to “check” whether a new tax regulation affects them before a summer deadline. HM Revenue and Customs (HMRC) has reminded Britons that a fresh system for self-employed individuals is now in place.
Called Making Tax Digital for Income Tax, this modification applies to self-employed workers and landlords earning above £50,000 per year. They will need to submit online updates quarterly rather than compiling everything at tax return time.
The system was launched earlier this month, with the initial deadline for submitting quarterly updates falling in August. In a message posted to social media platform X, HMRC stated: “Making Tax Digital for Income Tax is here.
“If your combined turnover from property and self-employment is more than £50,000, you’ll need to start keeping digital records and send quarterly updates (first deadline is 7 August). Check if Making Tax Digital applies to you and sign up today.”
According to the Government website, the change represents a “significant” and “ultimately time-saving” transformation in how individuals are required to maintain digital records and report their earnings.
GOV.UK states: “By keeping digital records throughout the year, sole traders and landlords can save hours previously spent gathering information at tax return time – allowing them to spend more time focusing on their business activities and in turn, driving economic growth as part of the government’s Plan for Change.
“Quarterly updates will spread the workload more evenly throughout the year, bring the tax system closer to real-time reporting and help businesses stay on top of their finances and avoid the last-minute rush.”
James Murray MP, exchequer secretary to the Treasury, weighed in on the new system, saying: “MTD for Income Tax is an essential part of our plan to transform the UK’s tax system into one that supports economic growth.
“By modernising how people manage their tax, we’re helping businesses work more efficiently and productively whilst ensuring everyone pays their fair share.
“This is a crucial step in this government’s decade of national renewal and our Plan for Change, as we clear away barriers that hold back growth.”
Qualifying income refers to gross earnings from self-employment and property prior to any tax allowances or expenses being deducted. Those with a qualifying income surpassing £30,000 will also be required to use MTD for Income Tax from April 2027. The threshold will then fall to £20,000 from April 2028.
For further details, visit the Government website here.
