Making Tax Digital for Income Tax (MTD IT) is a reality from April 2026, as confirmed at the UK Budget in October 2024.
The new regime will be implemented in phases as follows for sole traders or landlords with gross income (before expenses and tax are deducted) from self-employment and property:
- More than £50,000 need to start using MTD ITSA from 06 April 2026; and
- More than £30,000 need to start using MTD ITSA from 06 April 2027
The UK Budget in October 2024 committed to expand the rollout to those with income over £20,000 by the end of this Parliament in 2029.
MTD for Income Tax requires you to keep digital records and send quarterly updates of income and expenses to HMRC using compatible software. HMRC has produced promotional material ‘Benefits of Making Tax Digital’ at the same time as releasing a new agent ‘toolkit’ which compliments other guidance that is available. This contains useful sections including:
- An overview of the changes and how to prepare;
- The purpose of MTD ITSA;
- Communication resources for agents and clients;
- How to join testing voluntarily; and
- Links to MTD ITSA guidance
