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HM Revenue and Customs has launched the next phase of its Making Tax Digital for Income Tax programme, introducing major changes for self-employed workers and landlords across the UK.
The digital tax system officially began rolling out in 2026 for individuals earning more than £50,000 per year. Instead of relying only on the traditional annual Self Assessment tax return, affected taxpayers are now required to keep digital records and submit quarterly income updates online using HMRC-compatible software.
The rules currently apply to:
- Freelancers
- Delivery Drivers
- Tradespeople
- Consultants
- Online Sellers
- Landlords with Rental Income
HMRC confirmed that the £50,000 threshold is calculated using gross income rather than profit, meaning many independent workers and landlords may now fall under the new requirements.
Under Making Tax Digital, taxpayers must:
- Keep digital financial records
- Use compatible tax software
- Submit quarterly income and expense updates
- Complete a final declaration each tax year
HMRC says the changes are intended to modernise the UK tax system and reduce mistakes caused by paper records or manual reporting.
The tax authority has also announced plans to expand the programme further. People earning more than £30,000 are expected to join from April 2027, while those earning above £20,000 could be added at a later stage.
To help taxpayers prepare, HMRC is offering free online guidance, webinars, tutorials, and updated software support. Some users may also qualify for exemptions if they are unable to use digital tools.
Officials are advising taxpayers to ensure any software they choose is fully compatible with Making Tax Digital before registering for the service.
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