Hmrc confirms exact date huge change to income tax will start and what it means

FROM APRIL NEXT YEAR, TAXPAYERS EARNING OVER £50,000 FROM SELF-EMPLOYMENT OR PROPERTY INCOME WILL NEED TO COMPLY WITH NEW MAKING TAX DIGITAL (MTD) FOR INCOME TAX RULES 09:42, 22 May 2025 A

major tax change will be introduced next year, affecting thousands of Brits. HMRC has confirmed that the next phase of the rollout for Making Tax Digital (MTD) will go ahead on April 6,

2026. From this date, taxpayers earning over £50,000 from self-employment or property income will need to comply with new MTD for Income Tax rules. This is a new system for recording and

reporting income and expenses, and all businesses' records will need to be kept digitally, and you will need to file quarterly updates on your earnings to the tax office. The move is

expected to affect approximately 780,000 people in its first wave. The next wave will be introduced from April 2027 for those earning between £30,000 and £50,000, with another 970,000 people

affected. A further expansion to those earning £20,000 will be introduced from April 2028 under the current plans. According to HMRC, the change is designed to improve accuracy, reduce

errors, and save time. They believe the digital transition will help taxpayers stay on top of their obligations while offering a clearer picture of their tax position year-round. READ MORE:

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Making Tax Digital testing programme, which the tax office says will give people extra time to familiarise themselves with the new system and access dedicated support. Article continues

below Making Tax Digital has already been rolled out for VAT and has reportedly helped over two million businesses reduce errors and increase efficiency. A 2021 report found that 69% of

businesses saw at least one benefit, with 67% reporting fewer record-keeping mistakes. Last month, James Murray MP, Exchequer Secretary to the Treasury, said: "MTD for Income Tax is an

essential part of our plan to transform the UK's tax system into one that supports economic growth. By modernising how people manage their tax, we're helping businesses work more

efficiently and productively while ensuring everyone pays their fair share. “This is a crucial step in this government's decade of national renewal and our Plan for Change, as we clear

away barriers that hold back growth.” JOIN MONEY SAVING CLUB'S SPECIALIST TOPICS For all you savvy savers and bargain hunters out there, there's a golden opportunity to stretch

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more of the following topics to get all the latest deals and advice on: Travel; Property; Pets, family and home; Personal finance; Shopping and discounts; Utilities. Craig Ogilvie, HMRC’s

Director of Making Tax Digital, said: "MTD for Income Tax is the most significant change to the Self Assessment regime since its introduction in 1997. It will make it easier for

self-employed people and landlords to stay on top of their tax affairs and help ensure they pay the right amount of tax. "By signing up to our testing programme now, self-employed

people and landlords will be able to familiarise themselves with the new process and access dedicated support from our MTD Customer Support Team, before it becomes compulsory next year.”

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