Self-employed workers earning over £50,000 will be required to join the government’s new digital tax reporting system from April 2026. The change is part of the ongoing Making Tax Digital initiative, which aims to streamline the way income tax is reported and paid.
HM Revenue and Customs (HMRC) has issued an urgent reminder to self-employed individuals and landlords with annual earnings above £50,000. With just six months remaining, those affected must prepare to switch to the Making Tax Digital for Income Tax Self Assessment (MTD ITSA) system.
First announced as part of the UK government’s broader plan to modernise tax administration, MTD will alter how self-employment and property income is recorded and submitted. While currently voluntary for most, the new system will become mandatory for thousands starting in the 2026–2027 tax year.
Who Must Comply With MTD for Income Tax From April 2026
From 6 April 2026, individuals earning more than £50,000 per year from self-employment, property, or both combined will be legally required to follow Making Tax Digital for Income Tax procedures. The income threshold applies to the 2024–2025 tax year, and HMRC will assess eligibility after reviewing Self Assessment tax returns submitted by 31 January 2026, according to official guidance.
Those above the income threshold will be contacted by HMRC to confirm whether they must join the scheme. Affected individuals or their tax agents must then register for the service and ensure they are using compatible software to maintain digital records and submit quarterly updates of income and expenses.
This marks a shift from the traditional annual tax return system. Under MTD ITSA, taxpayers will provide four updates per year, followed by an end-of-period statement and a final declaration. According to HMRC, the aim is to reduce errors and provide a clearer view of tax liabilities throughout the year.
Exemptions and Voluntary Participation
Not all self-employed workers or landlords will be required to sign up. HMRC has outlined several automatic exemptions, including individuals acting as personal representatives of a deceased person, trustees, or non-resident companies. Exemptions also apply to people without a National Insurance number as of 31 January preceding the tax year, and to Lloyd’s members in relation to underwriting business.
There are also applications for exemption available for individuals unable to engage with digital tools due to age, disability, or living in areas with limited internet access. In addition, those whose religious beliefs are incompatible with digital systems may also qualify for exemption.
Those earning below £50,000, or individuals who have not yet submitted their first Self Assessment tax return, will not be required to join the scheme but may opt in voluntarily. The government has also stated that MTD for partnerships is on the horizon, although no firm timeline has yet been confirmed.
