UK self-employed individuals and landlords earning over £50,000 are facing a major change in how they report their income. HM Revenue and Customs (HMRC) has issued a reminder that, beginning 6th April, they must comply with the new Making Tax Digital (MTD) for Income Tax system.
Under this new scheme, instead of submitting a single annual tax return, qualifying taxpayers will need to provide quarterly updates online using recognised software. This shift is designed to spread tax reporting more evenly throughout the year, helping users stay organised and avoid last-minute rushes.
HMRC explained via social media: “With Making Tax Digital, you’ll send simple quarterly summaries, then one annual return that pulls together the information you’ve shared throughout the year. If your combined turnover from self-employment and property is over £50,000, flip your routine to little-and-often now.”
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According to the Government website, this transition is a significant and ultimately time-saving change. By maintaining digital records year-round, sole traders and landlords can reduce the hours spent compiling information at tax time, allowing more focus on running their businesses. This move also aligns with the government’s broader Plan for Change to boost economic growth by modernising tax processes.
James Murray MP, exchequer secretary to the Treasury, highlighted the importance of MTD for Income Tax: “This initiative is a key part of transforming the UK’s tax system to support economic growth. Modernising tax management helps businesses operate more efficiently while ensuring everyone contributes their fair share. It’s an essential step in delivering our decade of national renewal.”
Looking ahead, the MTD scheme will extend to those with qualifying income over £30,000 starting April 2027, and then to those earning over £20,000 from April 2028.
Workers affected by these changes are urged to register for the scheme promptly in preparation for the April deadline.