With just seven months to go until mandatory Making Tax Digital (MTD) for Income Tax, HMRC has confirmed that 864,000 landlords and self employed will be caught by the quarterly reporting rules from day one
The first phase of MTD for Income Tax will kick in from April 2026 requiring individuals with a qualifying income over £50,000 to file quarterly returns using software with a final year end round out. The first quarterly filing date is set for 7 August 2026 and a new penalty system for non compliance will be in force.
Initially MTD will only affect higher earners in this cohort, but quarterly filing will be quickly rolled out to a wider audience with the threshold dropping to £30,000 in April 2027 dragging in 1,077,000 individuals, then falling to a negligible £20,000 from April 2028 with another 975,000 required to report.
Around 2.9 million (42%) of which have a qualifying income above £20,000 and will need to join MTD for Income Tax, based on self assessment figures for 2023-24.
