The Government is making many changes to the way tax information is shared and processed for individuals and businesses. It is the most fundamental change to the administration of the tax system for at least 20 years. Two of the changes that were proposed are:
For the latest information see https://www.gov.uk/government/collections/making-tax-digital-for-income-tax
There will be a phased introduction. From April 2026, self-employed individuals and landlords where the total income from those 2 sources is more than £50,000 will be required to keep digital records and provide quarterly updates on their income and expenditure to HMRC through MTD-compatible software. Those with an income of between £30,000 and £50,000 will need to do this from April 2027. Those with an income of between £20,000 and £30,000 will need to do this from April 2028.
Most customers will be able to join voluntarily beforehand meaning they can eliminate common errors and save time managing their tax affairs.
The government has also announced a review into the needs of smaller businesses, and particularly those under the £20,000 income threshold. The review will consider how MTD for ITSA can be shaped to meet the needs of these smaller businesses and the best way for them to fulfil their Income Tax obligations. It will also inform the approach for any further roll out of MTD for ITSA after April 2027.