The UK government is changing how self-employed individuals and landlords report their Income Tax. This is part of the broader Making Tax Digital (MTD) initiative, which aims to modernise the UK tax system by requiring digital record-keeping and more frequent reporting.
From April 2026, if you earn over £50,000 per year from self-employment or property letting, you’ll need to follow the new MTD rules. From April 2027, these same rules will apply to those earning between £30,000 and £50,000. If your income is under £30,000, you won’t be included for now, but HMRC is still reviewing how to involve smaller earners in the future.
What counts as income?
Only income from self-employment and property counts towards the MTD income threshold. This is called qualifying income. Other income, such as from employment or dividends, does not count towards the MTD threshold.
What will change?
Instead of sending one tax return a year through Self Assessment, you’ll need to:
– Keep digital records of your income and expenses using HMRC-approved accounting software
– Send a summary of your business income and expenses to HMRC every three months
– Submit an End of Period Statement at the end of the tax year to finalise any adjustments
– Confirm all your income and send a Final Declaration (which replaces your usual tax return)
To help you stay compliant, here are the key dates you’ll need to know:
| Quarter | Tax Period | Filing Deadline |
| Q1 | 6 April – 5 July | 7 August |
| Q2 | 6 July – 5 October | 7 November |
| Q3 | 6 October – 5 January | 7 February |
| Q4 | 6 January – 5 April | 7 May |
Can I start early?
Yes. HMRC allows voluntary sign-up for MTD before it becomes mandatory. Early adopters can test the system and develop new habits ahead of the deadline.
Are there any exemptions?
Some individuals may be exempt from using MTD due to age, disability, or lack of access to digital services. If you believe MTD is not practical for you, we can advise you on how to apply for an exemption.
What if I don’t comply?
HMRC will introduce late filing penalties for late submissions or failure to meet MTD requirements. These will follow a points-based system, meaning repeated delays will result in fines. Staying organised and filing each quarter on time is essential to avoid late filing penalties.
How can we help
For many people, this will mean changing how they manage their accounts. Paper records and spreadsheets won’t be enough anymore. You’ll need to use digital tools or accounting software that meet HMRC’s requirements.
At IB Service Ltd, we assist clients in getting ready for MTD by:
– Reviewing how you currently manage your records
– Setting up and training you on suitable accounting software
– Managing your quarterly updates and annual submissions
– Offering ongoing assistance to make sure everything stays on track
If you’re not sure whether these changes apply to you or want help preparing, contact us. Preparing in advance will help ensure a smooth transition.
