HMRC have confirmed the expansion of the Making Tax Digital (MTD) for Income Tax pilot from 2025. Taxpayers with High-Income Child Benefit Charge (HICBC) and income from jointly let property can now sign up for testing under the pilot for 2025/26.
On 3 February 2025, HMRC updated their guidance, making slight changes that expand the pool of eligible volunteers to include taxpayers with High-Income Child Benefit Charge (HICBC) and income from Jointly let property from April 2025.
- Before volunteering, eligible sole traders and landlords must ensure they are using Compatible software that meets the minimum requirements.
- Broadly, to be eligible, sole traders and landlords must:
- Have a National Insurance number.
- Be registered for self-assessment and have submitted at least one Self Assessment tax return.
- Have up-to-date tax returns, records and personal information filed with HMRC.
- Be UK resident.
- Must have an accounting period that either;
- Runs from 6 April to 5 April or,
- From 1 April to 31 March, with software that supports this.
- Sole traders and landlords remain ineligible to volunteer where they have partnership income, trust income, HMRC debt or payment arrangements, bankruptcy/individual voluntary arrangements or if they are claiming blind persons' allowance or marriage allowance. In addition, MPs, Ministers and Lloyds underwriters are excluded.
To check eligibility, use our MTD: Income Tax Pilot Tool.
MTD for Income Tax will be mandatory:
- From April 2026 for self-employed businesses and landlords with business turnover above £50,000.
- From April 2027 for self-employed businesses and landlords with business turnover above £30,000.
- It was announced at Autumn Budget 2024 that self-employed businesses and landlords with a turnover above £20,000 will be mandated into MTD ITSA within the term of the current parliament.
- No timetable has yet been introduced for partnerships will be mandated to join MTD.
Useful guides on this topic
Making Tax Digital for Income Tax: Data required by HMRC
Making Tax Digital: what information do you need to submit? Making Tax Digital for Income Tax: categories of information required. This list has been updated and major changes are noted.
Compare software for Making Tax Digital for Income Tax
What's the cheapest software I can use for Making Tax Digital for Income Tax? What is the best value software can I use? How do a file a Self Assessment tax return under Making Tax Digital?
Making Tax Digital: Index & timeline
When does Making Tax Digital (MTD) apply? What does Making Tax Digital really mean? How will it affect you? Does MTD mean quarterly reporting? Is my business exempted from Making Tax Digital?
MTD: Income Tax Pilot Tool
Making Tax Digital (MTD) for Income Tax. Are you eligible to take part in the MTD Pilot?
Penal+ties: Making Tax Digital
HMRC's Making Tax Digital (MTD) programme has resulted in a re-design of penalties for late filing and payment.
High-Income Child Benefit Tax Charge
What is the High-Income Child Benefit Charge? Who pays it? Can you appeal against an assessment? Are there any useful cases from the tax tribunals?
Joint property elections
When a property is held in joint names it is mainly taxed according to beneficial ownership. There is an exception where married couples and civil partnerships hold joint property. Trusts are also taxed differently.
External Links
HMRC Guidance: Sign up voluntarily for Making Tax Digital for Income Tax
