MTD for Income Tax – A reminder of what’s to come

Due to a lack of updates from HMRC, you would be forgiven for thinking that the brakes had been applied to the rollout of MTD for Income Tax. You would be wrong! 

Despite the uncertainty surrounding the implementation of this new digital scheme, HMRC is still pressing ahead. This is what we know so far:

• The scheme will apply to self-employed individuals and property landlords.
• Phase 1 – from April 2026 – applies to those with an annual income of £50,000 a year or more.
• Phase 2 – from April 2027 – applies to those with an annual income between £30,000 and £50,000.
• The tax year dates remain unchanged.
• MTD for Income Tax also applies to self-employed individuals who must comply with MTD for VAT.

Regardless of which date the taxpayer enters the scheme, the compliance process is as follows:

• All income and expense information must be recorded and submitted digitally every quarter using HMRC approved MTD for Income Tax compatible software.

• Taxpayers must make any accounting adjustments or allowances to their digital records.
• The Final Declaration, which replaces the Self Assessment part of the return, must be filed, and any tax due should be paid by 31 January after the end of the tax year.

No announcements have been made regarding how or when individuals earning less than £30,000 a year or partnerships will be required to join the scheme.

We will let you know if any changes are made to the timings or the eligibility criteria.