HMRC has begun writing to hundreds of thousands of taxpayers as it steps up awareness of Making Tax Digital for Income Tax. From April 2026, self-employed individuals, sole traders and landlords with income over £50,000 will be required to keep digital records and submit quarterly updates to HMRC.
Nearly 900,000 people are expected to fall within the first phase of MTD for Income Tax. The latest letters are going to those who submitted a 2024/25 tax return by August, informing them that their declared income places them within scope from April 2026. Each letter contains guidance, preparation steps and a QR code linking to HMRC resources.
HMRC has also alerted accountants and tax advisers that they should expect increased enquiries over the coming weeks. It recommends reviewing 2024/25 tax returns to identify affected clients and help them understand the upcoming obligations.
Under the new system, taxpayers must maintain digital records of self-employment and property income and expenses, submit quarterly returns for each income type, and still file a year-end return, with tax due by January 31. HMRC will not provide free software, aside from a limited basic option from Sage. Therefore, affected taxpayers must either purchase commercial software or work with an accountant.
Record-keeping must begin on 7 April 2026, ahead of the first quarterly update, which is due by 7 August 2026. Earlier letters sent to around 864,000 taxpayers signalled the scale of the change, and HMRC has confirmed that penalties will apply for non-compliance, emphasising the need to prepare now.
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