HMRC plans to use data from 2024/25 tax returns to identify who needs to join Making Tax Digital (MTD) for Income Tax from April 2026. However, affected taxpayers may not receive formal notifications until as late as February or March 2026, which could leave very little time to prepare for this significant change.
The Low Incomes Tax Reform Group (LITRG) is therefore encouraging self-employed individuals and landlords to file their 2024/25 tax returns well ahead of the 31 January 2026 deadline. Early filing will allow them to see whether their income exceeds the £50,000 threshold that triggers the MTD requirements.
Anyone reporting more than £50,000 in gross income from self-employment and/or rental income will be required to comply with MTD rules, which includes using compatible digital software to report income and expenses.
There are, however, certain exemptions available. For example, individuals who are digitally excluded due to age, disability, or remote location may be able to apply for an exemption from MTD, even if their income surpasses the threshold.
Sharron West, Technical Officer at LITRG, said:
“While the deadline for filing tax returns for 2024/25 is still some months away, those who believe they might fall within the scope of MTD should consider acting now. Submitting your tax return early will confirm whether you are required to comply with MTD from April 2026.
“Waiting to hear from HMRC could leave you with very little time to prepare. By filing early, not only will you give yourself the best chance of being ready for the upcoming digital requirements, but you’ll also know your tax liability well before the January 2026 payment deadline, providing more time to plan financially.”
LITRG is urging anyone uncertain about their position to take proactive steps to avoid a last-minute rush and ensure they are ready for MTD when it comes into effect.
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