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MTD for Income Tax becomes mandatory on 6 April 2026 for self-employed individuals and landlords earning over £50,000 annually. To avoid disruption and penalties, it’s essential to prepare early and understand how this major change will affect your tax reporting.
What Is MTD for Income Tax and Who Needs to Comply?
MTD for Income Tax (Making Tax Digital) is one of the most significant updates to the UK’s self-assessment tax system since 1997. It requires affected individuals to maintain digital records and submit quarterly updates on their income and expenses through MTD-compatible software.
Starting April 2026, self-employed individuals and landlords with gross annual income exceeding £50,000 must comply with MTD for Income Tax. This includes all income from self-employment and property before deductions or tax reliefs.
MTD for Income Tax Rollout Timeline
The first phase of MTD for Income Tax will affect around 780,000 taxpayers. Then:
- In April 2027, the rules expand to those earning between £30,000–£50,000.
- From April 2028, based on the Spring Statement 2025, it will apply to individuals with income over £20,000.
- For those below this threshold, the government is still reviewing the most effective implementation approach.
How to Get Ready for MTD for Income Tax
HMRC is currently inviting eligible taxpayers to join the MTD testing programme via GOV.UK. This allows users to experience the new digital process before it becomes mandatory. Notably, no late submission penalties apply during this testing phase.
Getting familiar with MTD for Income Tax requirements early means you can ensure smoother digital reporting, avoid future fines, and reduce filing errors.
Why MTD for Income Tax Matters
Following the success of MTD for VAT, which has helped over 2 million UK businesses improve tax accuracy and reduce reporting mistakes, MTD for Income Tax aims to extend these benefits to individual taxpayers.
Whether you’re a sole trader, landlord, or small business owner, shifting to digital tax reporting now will save you time, keep you compliant, and improve the accuracy of your financial records.
Prepare Now for MTD for Income Tax
With the MTD for Income Tax deadline on the horizon, now is the time to:
- Choose MTD-compatible software
- Digitise your record-keeping
- Understand quarterly update requirements
- Join HMRC’s testing pilot if eligible
- Seek advice from a tax professional if unsure
