HMRC issues tax warning to workers and landlords with new rule now in force

HM Revenue and Customs (HMRC) is contacting workers across the UK to remind them about major changes to tax reporting rules as Making Tax Digital for Income Tax becomes a legal requirement from April 6, 2026.

Self-employed people and landlords with turnover exceeding £50,000 in the 2024/25 tax year will be the first group required to comply with the new system.

HMRC said: "If you're a sole trader or landlord without an accountant or bookkeeper, register for this webinar for the latest information about MTD, to help you get ready for when MTD for Income Tax, which is now a legal requirement from April 6, 2026, for those with a turnover over £50,000."

The introduction of Making Tax Digital represents a significant change in the way self-employed workers and landlords report their income to HMRC.

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Instead of completing a single self-assessment tax return at the end of the tax year, affected taxpayers will be required to submit quarterly updates through compatible software, followed by a final declaration once the tax year has ended.

Those covered by the new rules will need to maintain digital records and use software that is compatible with Making Tax Digital requirements.

HMRC has confirmed the changes are being introduced in phases to allow taxpayers additional time to adapt to the new reporting process.

Initially, the requirements will apply to individuals with turnover above £50,000 in the 2024/25 tax year.

From April 2027, the threshold will be reduced to £30,000, meaning people who earn more than that amount in the 2025/26 tax year will also be required to use the digital system.

The rollout will expand again from April 2028, when those with turnover above £20,000 in the 2026/27 tax year will be brought into the scheme.

The phased approach means a growing number of self-employed workers and landlords are expected to move to the new system over the coming years.

HMRC is encouraging taxpayers to monitor their earnings to determine when they may be affected by the changes.

To help people prepare, the department is hosting webinars aimed at sole traders, landlords and joint property owners.

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The webinars explain how the rules work, when taxpayers may need to comply, how to choose suitable software and the process for signing up to Making Tax Digital.

HMRC said the sessions will also examine ways taxpayers may be able to benefit from the digital reporting system.

People who prefer to learn at their own pace can also access a range of short videos published on HMRC's YouTube channel, including guidance on how to sign up for Making Tax Digital for Income Tax.

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