This change has been described as ‘significant’ by HM Revenue & Customs
UK workers are being alerted to a significant tax change due to come into effect next year. This modification will affect self-employed people and landlords earning over £50,000 per annum from April 2026.
Those impacted will be required to submit quarterly updates using HM Revenue & Customs (HMRC) approved software if their turnover exceeds £50,000 from self-employment or property income. This new system, dubbed Making Tax Digital (MTD) for Income Tax, is scheduled to launch on 6 April.
The Government has described this as a “significant” and “ultimately time-saving” shift in the way people are obliged to keep digital records and report their earnings.
GOV.UK said: “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, said: “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 while 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 encompasses gross earnings from self-employment and property before any tax allowances or expenses are deducted. Individuals with qualifying income exceeding £30,000 will also need to adopt MTD for Income Tax from April 2027.
The threshold will subsequently drop to £20,000 from April 2028. According to the Daily Record, HMRC projects approximately 780,000 self-employed people and landlords will need to use MTD for Income Tax from April 2026, with an additional 970,000 following suit from April 2027.
Further details are available on the Government website here.
