Under one year until Making Tax Digital for Income Tax launches 

Are you a sole trader or landlord with an income of over £50,000? From 6th April 2026, you should be eligible for Making Tax Digital (MTD) for Income Tax.¹

This is a government initiative designed to help taxpayers save time when submitting their returns, as well as ensuring people are up to date with their taxes and submitting the correct amount.

Rather than scrambling in a stressful rush to gather all the information you need when it's time to submit a tax return, this new scheme will get you to keep digital records throughout the year.

Who needs to sign up for MTD?

From 6th April 2026, you will need to sign up for MTD if all of the following apply:

• You are registered for self-assessment
• You started getting income from a property, self-employment, or both, before 6th April 2025
• You had a qualifying income of more than £50,000 during the 2024-2025 tax year²

Check if you are eligible for Making Tax Digital for Income Tax

When do you need to sign up for MTD?

MTD, which is part of the Labour Party's Plan for Change to help economic growth, becomes compulsory from 6th April 2026. From this date, around 780,000 taxpayers will be required to use MTD compatible computer software, keep digital records, and submit quarterly reports to the HMRC.¹

Taxpayers who meet the requirements are encouraged to sign up for a testing program before April 2026, so that they’re used to the system by the time it’s enforced.

The idea is to modernise the UK tax system, remove barriers to economic growth, and help higher-earning self-employed people and landlords keep track of their taxes to ensure they pay the correct amount and have a clearer idea of their tax situation throughout the year.

What is the qualifying income for MTD?

Relevant income for MTD includes gross income (total income from all sources) from properties or self-employment before any expenses or tax allowances are subtracted.

This is a phased introduction of what should eventually become the default tax system in the UK. Self-employed people and landlords, approximately 970,000 taxpayers in total, who earn over £30,000 will be required to use MTD for their tax returns from April 2027, and those who earn over £20,000 will be asked to sign up from April 2028.¹

This phased introduction of MTD for Income Tax follows the model of MTD for VAT, which reportedly introduced at least one benefit for 69% of eligible businesses.¹

The government is keen for taxpayers to sign up during the testing phase, highlighting that late returns during this stage will not carry a penalty, so people can get used to the system without worrying about being penalised. Signing up early will help HMRC troubleshoot the service and iron out any creases. The MTD customer service team will also be available to help people with the transition.

Sources

1. https://www.gov.uk/government/news/one-year-until-making-tax-digital-for-income-tax-launches

2. https://www.gov.uk/guidance/check-if-youre-eligible-for-making-tax-digital-for-income-tax

All the information in this article is correct as of the date of publishing. The opinions expressed in this publication are those of the authors Euxton Mortgage Market. The information provided in this article, including text, graphics and images does not, and is not intended to, substitute advice; instead, all information, content and materials available in this article are for general informational purposes only. Information in this article may not constitute the most up-to-date legal or other information.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

June 2025