Workers in the UK have been urged to “check” if a new tax rule applies to them ahead of a summer deadline. HM Revenue and Customs (HMRC) has reminded Brits that a new system for self-employed people is now here.
In a post made to social media platform X, HMRC said: “Making Tax Digital for Income Tax is here.
“If your combined turnover from property and self-employment is more than £50,000, you’ll need to start keeping digital records and send quarterly updates (first deadline is 7 August). Check if Making Tax Digital applies to you and sign up today.”
According to the Government website, the transition signifies a “significant” and “ultimately time-saving” shift in how people are required to maintain digital records and report their income.
GOV.UK explains: “By keeping digital records throughout the year, sole traders and landlords can save hours previously spent gathering information at tax return time – allowing them to spend more time focusing on their business activities and in turn, driving economic growth as part of the government’s Plan for Change.
“Quarterly updates will spread the workload more evenly throughout the year, bring the tax system closer to real-time reporting and help businesses stay on top of their finances and avoid the last-minute rush.”
Commenting on the system, James Murray MP, exchequer secretary to the Treasury, said: “MTD for Income Tax is an essential part of our plan to transform the UK’s tax system into one that supports economic growth.
“By modernising how people manage their tax, we’re helping businesses work more efficiently and productively whilst ensuring everyone pays their fair share.
“This is a crucial step in this government’s decade of national renewal and our Plan for Change, as we clear away barriers that hold back growth.”
Qualifying income refers to gross income from self-employment and property before any tax allowances or expenses are deducted.
People with a qualifying income exceeding £30,000 will also need to use MTD for Income Tax from April 2027. The threshold will subsequently drop to £20,000 from April 2028.
For further information, visit the Government website here.