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Posted: Fri 21st Feb 2025
HM Revenue & Customs (HMRC) will soon begin writing to sole traders and landlords whose 2023 to 2024 Self Assessment tax return shows their income was over or close to £50,000 that they may need to use Making Tax Digital (MTD) for Income Tax.
In its latest update to accountants and other agents, HMRC said it would start to get in contact with relevant tax payers from April this year.
From April 2026, self-employed individuals and landlords with an annual income over £50,000 will be required to submit quarterly tax updates to HMRC using approved software. It will be extended to those with income over £30,000 in April 2027.
The government estimates that around 780,000 people will be covered by MTD in 2026, with a further 970,000 in 2027.
Sole traders and landlords can sign up in advance of the deadline and take part in testing of the new system. Tax agents can sign up their clients, or taxpayers can register themselves.
MTD for Income Tax was first due to come into force in April 2023 but in September 2021, the change was delayed until April 2024 due to the impact of the coronavirus pandemic. In December 2023, the government announced another delay.
Making Tax Digital already applies to VAT.
