Making Tax Digital extended to income tax

HMRC is planning to extend its flagship Making Tax Digital initiative to include income tax reporting and it is setting up an initial pilot for self-employed individuals and tax agents to trial software to keep business records digitally and send income tax updates to HMRC, replacing the need to file a self assessment tax return in certain cases.

The service will be available for sole traders with income from one business and whose current accounting period ends after 5 April 2018. Anyone with income from other sources will still have to report it using a self assessment tax return.