HMRC presses on with roll-out of Making Tax Digital for Income Tax (MTD IT) – but changes plans for Corporation Tax.
MTD IT is now well on the horizon, with updated draft legislation published over the summer. Significantly, HMRC also published a Transformation Roadmap, highlighting the fact that digital self-serve is very much the direction of travel. According to this document, ‘HMRC will look very different by 2030. Almost all our straightforward customer queries will be handled digitally or automatically with at least 90% of customer interactions being digital’.
New rules for sole traders and landlords
MTD IT is the new way for income and expenses to be reported to HMRC. Under these mandatory new rules, sole traders and landlords must send updates, filed online using specific software, to HMRC every three months.
The change is being rolled out in phases from 6 April 2026, depending on the level of what is called ‘qualifying income’. Entry to MTD IT is mandatory for sole traders and landlords:
• From 6 April 2026 if qualifying income is over £50,000 for the 2024/25 tax year.
• From 6 April 2027 if qualifying income is over £30,000 for the 2025/26 tax year.
• From 6 April 2028 if qualifying income is over £20,000 for the 2026/27 tax year.
And other taxpayers
The government has also said that it will ‘continue to explore how we can best bring the benefits of digitalisation to a greater proportion of the four million sole traders and landlords who have income below the £20,000 threshold’. This appears to leave the door open for future changes affecting those below the £20,000 threshold.