Digital tax records – the deadline looms
Sole traders and landlords earning more than £50,000 from self-employment and property have just weeks left to prepare for Making Tax Digital (MTD) for Income Tax.
From April 6 those eligible will need to use recognised software to keep digital records and send HM Revenue and Customs (HMRC) light-touch quarterly updates of their income and expenses. These are not extra tax returns.
At the end of a tax year, those within MTD for Income Tax will still need to file a tax return by the following January 31 – but the software will already hold the information from the quarterly updates, meaning no last-minute hunt for records or receipts.
Craig Ogilvie, HMRC’s director of making tax digital, said: “A range of software is available and the system is straightforward and helps reduce errors. Thousands of volunteers have already used it successfully.
“This will make it easier for sole traders and landlords to stay on top of their tax affairs and help ensure everyone pays the right amount of tax.
“Spreading your tax admin throughout the year means avoiding that last minute scramble to complete a tax return every January.”
HMRC says thousands of sole traders and landlords have already signed up for MTD for Income Tax, with more than 12,000 quarterly updates successfully submitted through a voluntary testing programme.
Those joining MTD in April 2026 will still file their tax return for the 2025 to 2026 tax year in the usual way by January 31, 2027, as this covers the period before MTD begins.
The first MTD tax return, covering the 2026 to 2027 tax year, will be due by January 31, 2028.
To support the transition, the government has announced that customers joining MTD for Income Tax in April 2026 will not receive penalty points for late quarterly updates, for the first 12 months.
Under the new system, penalty points will be given for each late submission, with a £200 penalty only applied once four points are reached. This means occasional slip-ups won’t result in immediate fines.
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