HMRC reminder for self-employed and landlords
HMRC has issued a timely reminder that the way to report tax will change significantly from 6 April 2026.
If you have not yet checked whether you need to use Making Tax Digital (MTD) for Income Tax, you should do so urgently. HMRC has issued a timely reminder that for many self-employed and landlords the way to report tax to HMRC will change significantly from 6 April 2026.
Preparation is key, including choosing the right software and ensuring your digital records are up to date before the new tax year begins.
The impending deadline
The introduction of MTD for Income Tax represents the biggest change to the Self Assessment system since its inception. From April 2026, sole traders and landlords with a combined gross income exceeding £50,000 will be legally required to keep digital records and use MTD-compatible software to send quarterly updates to HMRC.
HMRC's latest reminder stresses that the £50,000 threshold applies to gross turnover or rental income, not net profit. Furthermore, if an individual has both self-employment income and property income, these must be added together to determine if the threshold is breached.
The requirements of MTD
Under the new rules, the traditional annual tax return will be replaced by a more frequent reporting cycle. Taxpayers will need to submit a summary of their income and expenses every three months. At the end of the tax year, an End of Period Statement (EOPS) must be filed to make accounting adjustments and claim reliefs, followed by a Final Declaration to calculate the overall tax liability.
Crucially, manual record-keeping using paper ledgers or basic spreadsheets will no longer be compliant unless bridging software is used. HMRC is strongly encouraging affected individuals to transition to dedicated cloud accounting software as soon as possible.
Act now to avoid disruption
Transitioning to digital record-keeping takes time. You need to select appropriate software, set up your accounts, and adjust your daily administrative habits. Waiting until the weeks before the April 2026 deadline risks significant disruption to your business and potential penalties for non-compliance. We urge all clients who may be affected to contact us immediately so we can help you implement the right digital solution for your needs.
Disclaimer
The information contained in this article is for general guidance on matters of interest only. It should not be used as a substitute for consultation with professional accounting, tax, legal, or other competent advisers. Before making any decision or taking any action, you should consult a Kingscott Dix professional.