HMRC Issues Urgent Reminder as New Tax Reporting Deadline Approaches

HM Revenue and Customs (HMRC) has issued a crucial reminder to self-employed individuals and landlords about upcoming changes to income tax reporting. Starting April 6th, those earning over £50,000 annually from self-employment or property must transition to the Making Tax Digital (MTD) for Income Tax system, which requires quarterly online updates instead of the traditional annual tax return.

This new digital framework is designed to make tax reporting more streamlined and manageable. HMRC explains that taxpayers will now submit simple quarterly summaries with recognised software, culminating in a single annual return that consolidates the data shared throughout the year.

By adopting digital record-keeping and spreading reporting across four quarters, MTD aims to reduce the time spent gathering information at year-end and help individuals better manage their finances in real-time. This approach is expected to support business efficiency and contribute to economic growth, aligning with the government’s broader Plan for Change.

James Murray MP, exchequer secretary to the Treasury, emphasized the significance of this initiative, stating, “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.”

The qualifying income threshold currently stands at £50,000, but it will lower to £30,000 in April 2027 and further to £20,000 in April 2028, gradually expanding the number of taxpayers required to use MTD. Qualifying income includes gross earnings from self-employment and property before deductions.

To avoid penalties and ensure a smooth transition, affected individuals are urged to register for the scheme ahead of the April deadline.