It’s not optional and HMRC stressed the ‘legal need’ to do it
HMRC has been contacting people to remind them of a new rule that started in April and will affect more people over the next couple of years. In an email, it reminded people about Making Tax Digital (MTD).
It is a new way of doing self-assessment for people who are self-employed or get income from property. Instead of doing one tax return at the end of each tax year, people will need to use a new system to make quarterly reports as well as an end-of-year one.
MTD-compatible software must be used to comply with the new way of doing things. In an email this week, HMRC explained that MTD was being phased in gradually.
For those whose turnover was more than £50,000 in the 2024/25 tax year, it is not required to use MTD. From April 2027, those who turned over more than £30,000 in the 2025/26 tax year will need to start using the system.
Finally, those who earned more than £20,000 in 2026/27 will need to use it from April 2028.
HMRC explained that it was running webinars about MTD to help landlords, joint property owners and businesses to prepare. Businesses can register here for the webinar ‘How to get ready for MTD if you are a business’.
Those who receive income from property can register here for the webinar ‘Get ready for Making Tax Digital – landlords and joint property owners’.
The sessions will cover the requirements of MTD for Income Tax, practical steps you can take to prepare your business, the rules, who will be affected and when, making informed software choices, authorising your agent, if applicable, and signing up to MTD and utilising any benefits and opportunities.
How to get ready for Making Tax Digital if you’re a sole trader
HMRC said: “If you’re a sole trader or landlord without an accountant or bookkeeper, register for this webinar for the latest information about MTD, to help you get ready for when MTD for Income Tax, which is now a legal requirement from April 6, 2026, for those with a turnover over £50,000.”
The webinar will look at planning for MTD for Income Tax, understanding the rules and work out if you’re affected and when, how to prepare for MTD for Income Tax, including what you need to do, the actions you will take and signing up for MTD for Income Tax and using MTD for Income Tax – following the rules and consider how you can utilise any benefits and opportunities.
There are also short videos, including ‘How do I sign up for Making Tax Digital for Income Tax’, available on HMRC’s YouTube channel.
