At McDade Roberts accountants, we help hundreds of Lancashire businesses and individuals navigate the every changing world of taxation. One of the latest hot topics is who will be impacted by the latest changes to making tax digital for income tax. We are always at the end of the phone or email if you need advice but also read on to find out more.
Who Will Need To Comply With Making Tax Digital For Income Tax First?
The HMRC website states that you will need to use Making Tax Digital for Income Tax if all of the following apply:
- You are an individual registered for Self-Assessment
- You get income from self-employment or property, or both
- Your qualifying income is more than £50,000 in the 2024 to 2025 tax year
What Is Included In Your Qualifying Income?
Your qualifying income is the total gross income that you get in a tax year from self-employment and property.
When the New Making Tax Digital for Income Tax Rules Will Apply
Making Tax Digital for Income Tax will become mandatory in phases, starting from 6 April 2026.
The government has announced that if your total gross income from self-employment and property is over £20,000, you will need to use Making Tax Digital for Income Tax in the future but the timeline for this has not yet been confirmed. Partnerships will need to use Making Tax Digital for Income Tax at a later date too.
Is Your Current Software Compliant With Making Tax Digital Reporting?
At McDade Roberts we help businesses comply with all the latest tax changes. Let us know the software you are using then we can help you assess whether it will be compliant with the new making tax digital for individuals rules. We partner with a number of software providers to help you report your income in as stress-free way as possible so just pick up the phone and we can have a chat.
What Happens If You Become a Sole Trader Or A Landlord After 6 April 2026?
You do not need to start using Making Tax Digital for Income Tax until after you have submitted your first Self-Assessment tax return.
What Will Happen By 6 April 2026?
You need to submit your Self-Assessment tax return for the 2024 to 2025 tax year by 31 January 2026.
HMRC will review your return and check if your qualifying income is more than £50,000
If it is, HMRC will write to you and confirm that you must start using Making Tax Digital for Income Tax by 6 April 2026. McDade Roberts can help you with this so please do get in touch.
We can help you to set up and use software that complies with Making Tax Digital for Income Tax so feel free to give us a call to help.
Who Will Need To Use the Service from 6 April 2026?
You will need to use Making Tax Digital for Income Tax from 6 April 2026 if all of the following apply.
- You are an individual registered for Self-Assessment
- You get income from self-employment or property, or both, before 6 April 2025
- You have a qualifying income of more than £50,000 in the 2024 to 2025 tax year
What Will Happen From 6 April 2027?
You will need to comply with Making Tax Digital for Income Tax from 6 April 2027 if all of the following apply:
- You are an individual registered for Self-Assessment
- You get income from self-employment or property, or both, before 6 April 2025
- You have a qualifying income of more than £30,000 in the 2025 to 2026 tax year
Who Will Not Need To Use Making Tax Digital For Income Tax?
If you are not automatically exempt, you may be able to apply for an exemption when the application process opens. You will need to show that it's not reasonable or practical for you to use software to keep digital records and submit them.
Still Confused About Making Tax Digital For Income Tax?
Don't be. The friendly team at McDade Roberts are just a phone call away. Give us a call, send us a message or email and we will be happy to point you in the right direction, get you set up with software and help you complete your self-assessment tax return. Contact us now