Making Tax Digital launches for self-employed earning over £50,000
From this tax year, sole traders and landlords with combined income above £50,000 must keep digital records and submit quarterly updates to HMRC.
By Money Guide editorial team
Published:
Making Tax Digital for Income Tax Self Assessment (MTD ITSA) came into force this tax year for sole traders and landlords with combined business and property income above £50,000. Affected individuals must keep digital records and submit four quarterly updates to HMRC, plus a final declaration after the tax year ends.
MTD-compatible software is required. Several free options are available (including HMRC-listed entry-level products and the FreeAgent package bundled with NatWest and Royal Bank of Scotland business accounts).
The £30,000 threshold takes effect in April 2027 and the £20,000 threshold in April 2028. Income below those thresholds remains under the existing annual Self Assessment process.
HMRC has indicated that, for the first year, the focus will be on supporting compliance rather than penalising errors. Affected taxpayers are encouraged to start trialling compatible software now rather than waiting.