HMRC has issued warnings about a new tax rule change expected to come into effect from next April. Customers have been informed about the rollout of Making Tax Digital (MTD) for Income Tax, which will see people report their earnings from self-employment and property income in a different way.
And while some people are already required to report their income and expenses this way, many are unaware that from next April, they will also need to do so.
In guidance sent to customers, HMRC warned: “If you get income from self-employment and/or property, you’ll legally need to use Making Tax Digital for Income Tax” once earnings pass certain thresholds.
The dates households should keep note of are as follows:
April 2027 for people with turnover above £30,000
April 2028 for people with turnover above £20,000
It is important to note that the thresholds are based on turnover rather than profit. Those who generate income from self-employment, rental properties, and joint property ownership will be affected by the change, and HMRC is therefore urging people in those groups to keep up to date with the latest information.
In one message to customers, HMRC said: “If you’re a sole trader or landlord without an accountant or bookkeeper… get the latest information about MTD, to help you get ready.”
If you are not sure whether the MTD currently applies to you, you can find out what is included in your qualifying income for MTD for Income Tax on GOV.UK
HMRC is offering official webinars on the MTD, with separate sessions available for businesses, landlords, joint property owners, and sole traders without accountants
The tax authority has also published online videos explaining “How do I sign up for Making Tax Digital for Income Tax”.
HMRC said the webinars will help customers understand “what you need to do”, “who will be affected” and how to get ready before the legal deadlines arrive.