HMRC is pressing ahead with Making Tax Digital (MTD) for Income Tax – and the clock is ticking. From 6 April 2026, the first wave of taxpayers will be brought into the new system, and while a few tweaks have been announced, the core rules remain the same.
The recent changes in a nutshell
Following the publication of draft legislation, here’s what’s new:
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More exemptions – Ministers of religion, Lloyd’s underwriters, recipients of the Blind Person’s Allowance and donors of a Power of Attorney will not be required to comply.
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Certain incomes excluded – Qualifying Care Income (such as foster care payments) and UK earnings of non-resident entertainers and sportspeople are outside the scope.
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Year-end filing still required via software – You’ll need MTD-compatible software to submit your annual tax return.
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A new ‘latency’ rule – If you start a new trade or property business, MTD won’t apply immediately. Instead, you’ll join the scheme from the 6 April following the tax year in which your filing obligation arises.
Who will be affected first?
If your total self-employment and property income (‘qualifying income’) was over £50,000 in the 2024/25 tax year, you’ll be in the first group to join MTD from 6 April 2026.
Those earning over £30,000 will follow from 2027, and those above £20,000 will be brought in at a later stage.
What MTD means for you
When you’re mandated into MTD for Income Tax, you’ll need to:
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Keep records digitally in MTD-compatible software
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Send quarterly updates to HMRC
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Submit your year-end return through the same software
These steps are designed to make tax reporting more accurate and efficient – but they will require changes to how you keep your books.
How to prepare now
The changes announced are relatively minor – the core requirements haven’t shifted. If you’re likely to be caught by MTD, now is the time to:
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Review your record-keeping process
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Choose MTD-compatible software (we recommend Xero, which we’re Platinum Partners for)
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Plan ahead for quarterly reporting so deadlines don’t creep up on you.
If you’re unsure whether you’ll be affected or when you’ll be mandated, get in touch with our team – we’ll review your situation and create a plan so you’re ready well before April 2026.