Self-employed workers and landlords face a tight deadline to adopt a new digital tax reporting system, as HM Revenue & Customs (HMRC) emphasizes that preparation time is running out. The initial phase of the mandatory Making Tax Digital (MTD) program launches on April 6, marking one of the biggest updates to the UK tax system in decades.
Who Needs to Comply?
This change targets individuals whose combined gross income from self-employment and UK property surpasses £50,000. Taxpayers meeting this threshold, based on their latest self-assessment for the tax year ending April 5, 2025, must transition away from relying solely on annual Self Assessment returns.
How the New System Works
From April 6, affected taxpayers must maintain digital records and submit quarterly updates to HMRC via approved software. These four annual summaries detail income and expenses, providing HMRC with a real-time overview of business activities without imposing additional tax payments.
Annual tax deadlines stay the same, but the reporting process shifts dramatically to digital submissions. Taxpayers handle sign-up themselves and must secure compatible software before the cutoff to avoid penalties.
HMRC’s Direct Warning
HMRC posted a reminder on April 3: “Time is running out to get ready for Making Tax Digital. From 6 April, if your combined turnover from self-employment and property is over £50,000, you’ll need to use recognised software and send quarterly updates. Act now – sign up and prepare.”
Many taxpayers have yet to implement proper record-keeping or software, heightening non-compliance risks.
Preparation Options
Businesses without digital setups can ease the switch using compatible tools, from comprehensive accounting packages to bridging software that integrates existing spreadsheets with HMRC systems.
Phased Rollout Ahead
The £50,000 threshold applies now, but it drops to £30,000 in April 2027 and £20,000 in April 2028, expanding MTD requirements to more taxpayers over time.
