Making Tax Digital: making it easier to get tax right

Making Tax Digital for Income Tax

Making Tax Digital (MTD) is an important part of our work to modernise the tax system.

As the Director for MTD, I’m really excited about the contribution that MTD for Income Tax can make to achieve this wider change. It will bring benefits for many of our customers both now and in the future. It will help to reduce errors, which supports business productivity and growth across the UK; ensure customers have up to date information to help with business planning; deliver a better customer experience by moving customer records onto a new system; and collect tax to support funding our public services.

MTD for Income Tax will be introduced in two phases:

1. From April 2026 the first phase will be rolled out. Self-employed individuals and landlords with gross income (turnover) from self-employment and property over £50,000 will be legally required to keep digital records. They will also need to send quarterly updates to HMRC using compatible software. A customers’ total income from these sources in the current tax year (2024/25) will determine if they have to use MTD from April 2026.

2. Those with a total gross income (turnover) over £30,000 will have to do this from April 2027.

Self-employed individuals and landlords with income from these sources below £30,000 will also be able to sign up voluntarily so they can benefit from the changes.

Help test the service

We recognise that this is a big change for everyone involved. That’s why it’s important we work together with agents, the software industry and customers to test MTD for Income Tax before it is rolled out from April 2026.

To ensure MTD for Income Tax meets the needs of all users, we’re thoroughly testing the service. Our testing programme helps us to make improvements and provides the opportunity for agents and customers to be involved in testing.

Joining the MTD for Income Tax testing programme provides you with the opportunity to be involved in testing with the dedicated help from HMRC’s support team. Taking part will give you the confidence you need by the time you and your clients are required to use the system from April 2026.

Before you sign up you will need to:

1. Read the eligibility criteria on GOV.UK and consider which clients you can sign up now. Many customers are already eligible to take part in testing, but anyone who is not currently eligible should be able to sign up later in 2025.
2. Speak to your client(s) to check they are happy for you to sign them up for testing, and that they have record-keeping software that is suitable and compatible with MTD.
3. Ensure that you have MTD compatible software ready to submit returns on behalf of your client(s). You can check available software options on GOV.UK. You will need to speak to your chosen software provider so they can give you access to their MTD compatible software product.
4. Sign up your client(s) for testing on GOV.UK.

Ahead of April 2026, customers will also be able to authorise more than one agent. This will mean they can nominate an agent and a bookkeeper to act on their behalf.

What benefits will digital record keeping and MTD bring?

Digital innovation touches every aspect of our daily lives. At HMRC we’re working hard to make it simpler for everyone to manage their tax affairs digitally too. MTD is delivering groundwork for technology changes that will enable this.

MTD for Income Tax will require customers to send quarterly updates of their income and expenses to HMRC. This will support business productivity by reducing the chance of making errors. Studies show that 67% of businesses feel using compatible software to keep digital records and submit VAT returns has reduced the potential for mistakes.

Where customers have kept accurate and up-to-date digital records, quarterly updates will be a simple check and send report generated by their compatible software. At the end of the year, when self-employed individuals and landlords file their tax return most of the information will be ready to submit. This will mean spending less time trying to put things right, and provide customers with up to date, accurate information for business planning.

By moving customers’ tax records to one new platform, HMRC will deliver a better customer experience. As well as supporting changes now and in the future, this will free up HMRC resources to help people who really need one-to-one support.

Reducing errors will give business owners more certainty in their finances, while minimising the amount of unpaid tax owed. It will also help to make sure customers pay the right amount of tax so that more money can go to funding public services, like the NHS, and supporting growth across the UK.

We’ve successfully delivered changes to how customers manage VAT. This means nearly two million businesses now use compatible software to digitally submit their VAT returns. Many businesses have said that they found the new process easy. Importantly, satisfaction with our digital services is consistently above 80%. We’re using our experience from this and current testing to improve the customer’s journey for Income Tax.

I’d really encourage you to start getting ready for MTD for Income Tax and sign up some of your customers to testing today. You can find more information on GOV.UK by searching ‘Making Tax Digital for Income Tax’.

Craig Ogilvie is the Director of Making Tax Digital, HMRC.