On 5 October 2026, HM Revenue & Customs (HMRC) issued a targeted press release urging sole traders and landlords with annual business or property income exceeding £30,000 to immediately prepare for Making Tax Digital for Income Tax (MTD for ITSA). This mandate, effective from April 2026, requires affected taxpayers to maintain digital records and submit quarterly updates via MTD-compatible software. The announcement reinforces the government’s commitment to modernising the tax system and reducing the tax gap through real-time reporting. Taxpayers who fail to comply face potential penalties and interest charges. HMRC’s campaign emphasises the availability of free software options and support for those transitioning from paper-based or spreadsheet records.
Key Takeaways
- Mandatory Digital Reporting Threshold: The £30,000 income threshold applies to combined trading and property income. Taxpayers above this limit must use MTD-compatible software to keep digital records and send quarterly updates to HMRC, replacing the annual Self Assessment tax return for income tax purposes.
- Quarterly Updates and Final Declaration: Affected individuals must submit four quarterly updates per tax year, followed by a final end-of-period statement and a single annual declaration. This shift aims to improve accuracy and help taxpayers manage their tax liabilities throughout the year.
- Support and Penalty Regime: HMRC highlights free software offers for low-income users and a points-based penalty system for late submissions. The regime includes a grace period for genuine errors, but persistent non-compliance will trigger financial penalties.
Disclaimer: This article is compiled and summarized by the AI based on publicly available information and is for general information purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. Please consult a qualified professional tax advisor or legal counsel for tax advice.
Source: Read Official Announcement