Making Tax Digital for Income Tax

HMRC is moving forward with its digital transformation of the UK tax system. Here’s what you need to know about the latest developments in Making Tax Digital (MTD) for Income Tax Self Assessment (ITSA).

Key Dates & Thresholds

From April 2026: MTD will be mandatory for individuals with gross income over £50,000 from self-employment and/or property. Please note, this is combined income across both sources, not individually.
April 2027: Threshold reduces to £30,000.
April 2028: Threshold drops further to £20,000, with full coverage expected, including partnerships.

Key Changes

For those who meet the income threshold, yearly tax returns will be replaced by quarterly digital reporting. Here’s what you will need to do:

• Use recognised software: Record income and expenses using an app or software on your phone or computer.
• Send quarterly updates: Submit updates to HMRC every three months directly from your software.
• Submit your final return: A final declaration will still be due by 31 January each year, as well as your usual self-assessment tax return currently. The long-term plan is to remove the need for a self-assessment tax return entirely.

What You Should Do Now

Reach out to your Griffin account manager to start planning for this change and get support with transitioning to MTD-compatible software if you haven’t already.