Making Tax Digital for Income Tax

It is confirmed that Making Tax Digital for Income Tax will affect Income Taxpayers with income of over £50,000 from 6 April 2026. This is applicable to those with self-employed income and rental property.

MTD for IT compliant software will be necessary in order to keep your financial records digitally, prepare and submit quarterly submissions of income and expenditure and then help with the preparation of your year-end tax return.

Will I Be Impacted?

If you have self-employment turnover or rental income exceeding £50,000, you will be mandated to be MTD for IT compliant in April 2026. HMRC are assessing the turnover made from your 2024-25 tax return in order to mandate the relevant people. If you believe that your turnover for 2024-25 exceeds £50,000 then please speak to your relevant Whitings contact/local Whitings office as soon as possible, so that your tax return can be completed and necessary preparations can be made.

What Information Will HMRC Need?

HMRC will require quarterly returns to be submitted which comprise of your total income and total expenditure for the quarterly periods. These submissions will be made through cloud based software. Therefore, if you are already using software such as Xero or QuickBooks, this is a great position to be in. To our clients that are not yet operating with the use of a cloud based software, you can expect correspondence from your local Whitings office soon (if not received already) that will detail the next steps to take moving forwards.

Partnerships and Limited Companies

HMRC have not yet announced plans for Partnerships or Limited Companies to be affected by Making Tax Digital, however it can be expected that this will change in the future. A change in business structure could therefore remove your requirement of being MTD for IT compliant, but please do seek advice from your relevant Whitings contact/local Whitings office in regard to this, if it is something you wish to explore.

April 2027 and April 2028!

Those with income below £50,000 will be gradually mandated to join MTD going forwards. It is now confirmed that from 6 April 2027, those with turnover above £30,000 will be affected, and from 6 April 2028 those with turnover in excess of £20,000.

Get In Touch

If you have any concerns or questions in relation to changes that are coming, please speak to your normal Whitings contact who can answer any questions or your local Whitings office for more information.

Disclaimer - All information in this post was correct at time of writing.