HMRC implements Making Tax Digital for Income Tax

HMRC is implementing Making Tax Digital (MTD) for Income Tax, a new system requiring landlords and self-employed individuals to maintain digital records and submit quarterly updates rather than traditional annual tax returns.

Compliance deadlines are being rolled out based on qualifying income thresholds. Individuals with income exceeding £50,000 in the 2024–25 tax year were required to comply starting 6 April 2026. The next phase applies to those with income over £30,000 in the 2025–26 tax year, effective 6 April 2027. A further threshold for income over £20,000 will follow on 6 April 2028.

HMRC has begun issuing letters to affected parties. Some individuals in the first compliance group may find they have been automatically signed up for the system if they have not yet registered. The process requires using compatible software to report income and expenses to ensure digital compliance.