From April 2026, significant changes are coming for individuals who are self-employed or receive income from property. As part of HMRC’s ongoing Making Tax Digital (MTD) initiative, those with qualifying income over £50,000 will be required to comply with a new system of tax reporting. In 2027, the threshold will drop to £30,000, and a future rollout is expected for those earning £20,000 or more.
These changes will affect thousands of sole traders, landlords, and business owners across the UK.
What’s Changing?
Under the new rules, affected individuals will no longer file a single annual Self Assessment tax return. Instead, they will be required to:
- Maintain digital records of income and expenses using MTD-compliant software
- Submit quarterly updates to HMRC throughout the tax year
- File a final declaration after year-end to confirm tax owed
This shift to more regular reporting is intended to improve accuracy and reduce errors, but it also introduces new obligations for those affected.
Why This Matters
With the introduction of quarterly updates, there’s a clear opportunity to gain better insight into your financial position across the year. But there are also risks, particularly if you are not prepared. Penalties for non-compliance are becoming more structured and can mount quickly for missed deadlines or late payments.
Early preparation is the key to avoiding unnecessary disruption.
Insights from The MGroup
At The MGroup, we are helping clients prepare now so they can adapt smoothly to the new system and avoid being caught off guard.
Partner Wendy Tatham comments:
“Making Tax Digital will give self-employed professionals and landlords a clearer, more up-to-date view of their financial position. If approached properly, it can be a positive change.”
Partner Jordan Lyne adds:
“We recommend starting digital record keeping early to aid with the transition and so we will shortly be announcing our service offerings which will support those who will need to comply with the new requirements from 2026. Our offerings will be designed to support our clients in this transition and will provide differing levels of support from ourselves, depending on individual needs.”
Steps You Can Take Now
- Check your total income – If you earn over £50,000 from self-employment and/or property, the 2026 deadline will apply to you.
- Look out for our service offerings – These will be released shortly and provide you with everything required in order to be ready for the upcoming changes
- Build the habit – Regular digital record keeping now will make quarterly submissions far easier when they become mandatory.
- Talk to us – Planning ahead with professional support makes the process more manageable and less stressful.
Supporting Our Professional Network
As active members of Opendoorz, The MGroup will be running a summer CPD session for fellow professionals to explain the practical implications of MTD for Income Tax. The session is open to members from a range of industries, not just those who are self-employed, and will focus on how to prepare yourself or your clients for what’s ahead.
At The MGroup, with offices in Oxford and Witney and a team of over 50, we’re committed to delivering proactive, partner-led advice. Whether through one-to-one guidance, community support, or sessions like our upcoming CPD at Opendoorz, we’re here to help individuals and businesses adapt with confidence.
If you’d like to discuss how MTD might affect you or your clients, get in touch with one of our team today.