HM Revenue and Customs (HMRC) has issued a two-month warning to over 860k sole traders and landlords relating to the new tax rules which come in on 6 April.
Affected parties are those who earn more than £50,000 from self-employment and property, and they are being urged to act now as the two-months deadline to the changes’ introduction arrives.
The Making Tax Digital (MTD) for Income Tax changes mean those eligible will need to use recognised software to keep digital records and send HMRC light-touch quarterly updates of their income and expenses, but note, these are not extra tax returns.
HMRC is providing a range of free support to help people prepare, including online guidance and videos. Anyone who genuinely cannot use digital tools can apply for an exemption, with further information and guidance available on GOV.UK.
Free software options are available and once income and expenses are recorded, the software generates a simple summary to send to HMRC.
At the end of a tax year, those within MTD for Income Tax will still need to file a tax return by the following 31 January – but the software will already hold the information from the quarterly updates, meaning no last-minute hunt for records or receipts.
“With two months to go until MTD for Income Tax launches, now is the time to act.”
Craig Ogilvie (below left), HMRC’s Director of Making Tax Digital, said: “With two months to go until MTD for Income Tax launches, now is the time to act. A range of software is available and the system is straightforward and helps reduce errors.
“This will make it easier for sole traders and landlords to stay on top of their tax affairs and help ensure everyone pays the right amount of tax.”
HMRC says more than 20k quarterly updates have already been successfully submitted through a voluntary testing programme.
Those joining MTD in April 2026 will still file their tax return for the 2025 to 2026 tax year in the usual way by 31 January 2027, as this covers the period before MTD begins. The first MTD tax return, covering the 2026 to 2027 tax year, will be due by 31 January 2028.
To support the transition, the Government has announced that customers joining MTD for Income Tax in April 2026 will not receive penalty points for late quarterly updates for the first 12 months.
Under the new system, penalty points will be given for each late submission, with a £200 penalty only applied once four points are reached. This means occasional slip-ups won’t result in immediate fines.
HMRC is urging those in scope of MTD for Income Tax to act now using the simple step-by-step guide here.
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