Making Tax Digital: HMRC Is Coming for You… Digitally!
We are into the second quarter of Making Tax Digital (MTD) for Income Tax and HMRC has decided that some of us need a little help getting organised. Their solution? They'll sign you up automatically!
So, when does MTD apply?
It depends on your total income from self-employment and property, before expenses:
Over £50,000 in 2024/25 → MTD from April 2026
Over £30,000 in 2025/26 → MTD from April 2027
Over £20,000 in 2026/27 → MTD from April 2028
And from September 2026, HMRC will start automatically signing up people who should be using MTD but haven't signed up themselves.
So, if you were planning to wait until HMRC reminded you, congratulations, they may have just saved you the effort!
MTD means keeping digital records and sending quarterly updates to HMRC using compatible software. But don't panic because quarterly updates aren't four tax returns a year. They're simply updates on your income and expenses.
The best approach is to get prepared before HMRC does it for you. Choosing software, sorting out your bookkeeping and getting into a regular routine now will make life much easier later.
After all, nobody wants their first introduction to MTD to be a letter from HMRC saying, "We've signed you up!"