Making tax digital for income tax

Last updated: 04/04/2025

Digital record keeping, reporting and paying tax, using MTD compatible software.
The legislation is expected to impose quarterly digital reporting obligations for income tax for self-employed individuals and landlords where their businesses are potentially within the scope of income tax. For UK residents, the regime will therefore apply to UK and foreign businesses alike.
Timing: MTD for ITSA will be introduced from April 2026 instead of April 2024 as previously announced. Self-employed individuals and landlords with receipts over £50,000 will be mandated to join first from April 2026. Those with receipts over £30,000 will be mandated from April 2027. Those with receipts over £20,000 will be mandated from April 2028. It is anticipated that most taxpayers within the scope of MTD for ITSA will be able to sign-up voluntarily before they are mandated to do so. HMRC will require MTD customers to file their tax return through MTD software instead of HMRC’s online filing service from April 2026.
Individuals who complete residence pages on their tax returns will not be required to use MTD until April 2027, providing a one-year deferral for this group. This deferral is due to the challenges associated with the replacement of the non-domicile regime with a new regime for new UK residents.
Certain groups will, or may be able to, qualify for an exemption, including ministers of religion, individuals who benefit from Blind Persons’ Allowance and foreign entertainers.
The previous government intended to introduce MTD for ITSA to partnerships at some point after individuals joined the regime. The new government has not provided any further detail on the expected timeline.