Are you ready for the introduction of Making Tax Digital for Income Tax?
From April 2026, if you have an income of over £50,000 annually, from self-employment and/or property rental, you will need to use Making Tax Digital (MTD) compatible software to provide HMRC quarterly updates and returns digitally.
Phased introduction
MTD for Income Tax will become mandatory in phases, with the initial phase starting in April 2026.
From April 2026, you will need to use MTD for Income Tax if all of the below apply:
- You are an individual registered for Self Assessment;
- You receive income from self-employment or property, or both, before 6 April 2025; and
- You have a qualifying income of more than £50,000 in the 2024-25 tax year.
From April 2027, you will need to use MTD for Income Tax if all of the below apply:
- You are an individual registered for Self Assessment;
- You receive income from self-employment or property, or both, before 6 April 2026; and
- You have a qualifying income of more than £30,000 in the 2025-26 tax year.
If your income from self-employment or property, or both, is more than £20,000:
- You will be required to use MTD for Income Tax by the end of this Parliament, approximately 2029. This announcement was made in the Autumn Budget.
How to check if Making Tax Digital for Income Tax applies
HM Revenue & Customs (HMRC) have added a helpful online tool that asks a series of questions to determine if individuals will need to use Making Tax Digital for Income Tax and when they need to start. Click here to access the interactive Making Tax Digital for Income Tax checker.
Next steps
HMRC will review Self-Assessment tax returns for 2024-25 to check if the qualifying income is more than £50,000. Taxpayers will then be contacted to confirm that they must start using MTD for Income Tax by 6 April 2026.
Individuals that need to sign up to Making Tax Digital for Income Tax, and those that have volunteered to test and develop the service, are required to use compatible software.
Ensuring you have the right software in place is an important first step in preparing for MTD for Income Tax, as it will enable you to create and store digital records of business income and expenses, send quarterly updates and receive information from HMRC. We will of course still deal with the annual tax compliance for you. Find out more about the list of compatible software currently available by clicking here.
How M+A Partners can help
M+A Partners will continue to provide updates on Making Tax Digital for Income Tax as further guidance is released.
Contact our team of experts to find out more about preparing for Making Tax Digital for Income Tax attleborough@mapartners.co.uk 01953 452077
