Making Tax Digital for Income Tax begins in April 2026, and if you’re self-employed or receive rental income, you’ll need to check whether it affects you. The rules aren’t aimed at everyone, but the thresholds mean more people will be included over time.
Who Must Comply With MTD?
If your total income from self-employment and property is £50,000 or more based on your 2024 to 2025 tax return, you’ll fall into the first group required to comply. That figure drops in later years, so even if you’re under it now, you might not stay that way.
You’ll need to add your business sales and rental income before expenses. If you meet the threshold, you’ll be expected to keep digital records. GOV.uk has a thorough guide on MTD that you may benefit from.
Can You Apply for an Exemption?
If using digital systems isn’t reasonably practical due to age, disability, lack of internet access or religious reasons, you can apply directly to HMRC. You’ll need evidence, and you should still prepare in case your request is refused. Many people seek guidance from Worcester accountants like randall-payne.co.uk/services/accountancy/worcester-accountants/ to check whether they genuinely qualify before applying.
Who Is Automatically Exempt?
A small number of people are automatically outside the rules. This includes certain trustees, individuals without a National Insurance number and some specific categories such as ministers of religion.
These exemptions aren’t blanket forever. You’ll need to review your circumstances each year.
Understanding your position early will help you stay compliant and avoid penalties.