Craig Ogilvie
Director of Making Tax Digital, HM Revenue and Customs
We are embarking on a digital transformation aimed at modernising the UK’s tax system. This will reduce the potential for error and support business productivity and growth.
Making Tax Digital (MTD) for Income Tax will make it easier for self-employed people and landlords to manage their tax, enabling businesses to take another step towards getting their tax affairs online. We’ve designed the new system around keeping digital records and using compatible software, which will make it easier for customers to get their tax right.
What’s changing with MTD for Income Tax?
MTD for Income Tax means self-employed people and landlords will need to keep digital records of their income and outgoings. They will submit quarterly updates to HMRC using compatible software – which will do much of the ‘heavy lifting.’ Regularly updating records and making full use of software features (such as helpful prompts) will reduce the chance of errors, meaning less time spent trying to put things right.
From April 2026, anyone with a gross income from self-employment and property over £50,000 will need to use MTD for Income Tax. Those with an income over £30,000 will need to do this from April 2027. The threshold for using MTD for Income Tax will eventually decrease to £20,000; the timing for this will be confirmed at a later date.
Self-employed people and landlords
will need to keep digital records
of their income and outgoings.
Benefits of taking part now
Most people who need to submit an annual Self Assessment tax return already do so online. Using MTD-compatible software will make this easier, as the information recorded in quarterly updates can be used to complete it. The software will also retrieve details of income from some sources already reported to HMRC and pre-populate it in the tax return. For example, income from PAYE employment or a pension. The software will also capture any student loan deductions.
We’re fully testing the MTD for Income Tax service with volunteers to make sure it meets the needs of all users. This helps us improve the service and allows users to get started and help shape it. Taking part in our testing programme now will also give customers and their agents more time to familiarise themselves with the new process before it becomes mandatory next year. Go to GOV.UK for more information on how to join.
For more information, visit GOV.UK and search ‘Making Tax Digital for Income Tax’
