This change will significantly alter how you report your earnings
UK workers have been alerted to a significant tax alteration set to be implemented shortly. HM Revenue and Customs (HMRC) has reminded people that from April, self-employed individuals will need to adapt to a new system.
The modification applies to self-employed persons and landlords earning over £50,000 annually. This means they will be required to submit online updates every quarter instead of consolidating everything at tax return time.
The new scheme, known as Making Tax Digital (MTD) for Income Tax, is set to commence on 6th April. In a post shared on social media platform X, HMRC stated: “With Making Tax Digital, you’ll send simple quarterly summaries using recognised software, then one annual return that pulls in the info you’ve shared across the year.
“If your combined turnover from self-employment and property is over £50,000, flip your routine to little-and-often now.” It then directed individuals to GOV.UK for further details.
According to the Government website, this transition signifies a “significant” and “ultimately time-saving” shift in how individuals are required to maintain digital records and report their income. GOV.UK explains: “By keeping digital records throughout the year, sole traders and landlords can save hours previously spent gathering information at tax return time – allowing them to spend more time focusing on their business activities and in turn, driving economic growth as part of the government’s Plan for Change.
“Quarterly updates will spread the workload more evenly throughout the year, bring the tax system closer to real-time reporting and help businesses stay on top of their finances and avoid the last-minute rush.”
James Murray MP, exchequer secretary to the Treasury, said: “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.
“This is a crucial step in this government’s decade of national renewal and our Plan for Change, as we clear away barriers that hold back growth.” Qualifying income refers to gross income from self-employment and property before any tax allowances or expenses are deducted.
Individuals with a qualifying income exceeding £30,000 will also need to use MTD for Income Tax from April 2027. The threshold will subsequently drop to £20,000 from April 2028.
Workers are urged to register for the scheme now ahead of the April deadline to ensure they’re prepared in time. You can do this here.
For further information, visit the Government website here.
