HMRC is mailing notifications to households with income exceeding £50,000, signaling upcoming transformations in tax self-assessment procedures.

Making Tax Digital Launches April 2026

Starting April 6, 2026, Making Tax Digital (MTD) for Income Tax requires more frequent submissions. Self-employed individuals and landlords whose combined income from self-employment and property surpasses £50,000—calculated before expenses and taxes—must adapt to these rules for the 2026-2027 tax year.

Under the new system, taxpayers submit quarterly updates digitally instead of one annual return. They must use compatible software for record-keeping and file the year-end return by January 31. The traditional HMRC Online Tax Return service and paper filings will no longer be available.

Penalties for Non-Compliance

Missing quarterly deadlines incurs penalty points, potentially leading to fines. This shift aims to streamline tax reporting and enhance accuracy.

A tax spokesman from Nannywage explained: “If your 2024 to 2025 self-assessment return shows income above £50,000 from self-employment and property, HMRC is notifying you that Making Tax Digital for Income Tax will apply from April 6, 2026. That £50,000 is based on income before expenses and tax are deducted, which catches some people off guard, particularly household employers who also have business or rental income. From the 2026 to 2027 tax year, those affected will no longer be able to use the current HMRC Online Tax Return system or file on paper. Instead of one annual return, you will need compatible software to keep digital records, submit quarterly updates and complete your year-end tax return by January 31.”