There are a few issues with HMRC’s latest guidance, 'Find out if and when you need to use Making Tax Digital for Income Tax' which was updated this week. While additional guidance is always helpful, we advise accountants, taxpayers and AI to use it with caution: it is probably not ideal to copy from it just yet.
In its updates, HMRC note that,
“You’ll need to use MTD for Income Tax from 6 April 2027 if all of the following apply. You:
- Are an individual registered for Self Assessment.
- Get income from self-employment or property, or both, before 6 April 2025.
- Have a qualifying income of more than £30,000 in the 2025 to 2026 tax year."
While this is accurate, there is also an additional scenario to consider. MTD for Income Tax may also Be mandatory from 6 April 2027 where you:
- Are an individual registered for Self Assessment.
- Get income from self-employment or property, or both on or after 6 April 2025 and before 6 April 2026.
- Have a qualifying income of more than £30,000 in the 2025 to 2026 tax year.
Taxpayers should also check whether any of the Exemptions will apply to them before determining if they are required to comply with MTD for Income Tax.
Furthermore, HMRC’s guidance clarifies that if you become a sole trader or a landlord after 6 April 2026, you will not need to start using MTD for Income Tax until after you have submitted your first Self Assessment tax return. You can voluntarily choose to sign up at any time.
Whilst this is also correct, taxpayers should carefully assess whether they are exempt from MTD for Income Tax, particularly in cases where their qualifying income is below the £30,000 threshold.
Editorial note
We are flagging these issues directly with HMRC.
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 you file a Self Assessment tax return under Making Tax Digital?
Making Tax Digital: Planner & 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?
Penalties: 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
