Self-employed and landlords face new HMRC rules April 6

Sole traders and landlords earning more than £50,000 must use new software for quarterly updates to HMRC from April 6

Self-employed individuals and landlords with earnings exceeding £50,000 from self-employment and property are being encouraged to take action immediately, with only days remaining to get ready for Making Tax Digital (MTD) for Income Tax.

From April 6 2026, those who qualify will be required to use approved software to maintain digital records and submit straightforward quarterly updates of their income and expenditure to HM Revenue and Customs (HMRC). It is worth noting that these are not additional tax returns.

HMRC is offering a variety of free resources to assist people in getting prepared, including online guidance, webinars and videos. Those who genuinely are unable to use digital tools may apply for an exemption, with further details and guidance available on GOV.UK.

Free software options are on offer and once income and expenditure have been logged, the software produces a straightforward summary to submit to HMRC.

At the close of the tax year on April 5, those within MTD for Income Tax will still be required to file a tax return by the subsequent January 31 — however, the software will already contain the information from the quarterly updates, eliminating any last-minute scramble for records or receipts, reports the Daily Record.

Craig Ogilvie, HMRC’s Director of Making Tax Digital, said: “A range of software is available and the system is straightforward and helps reduce errors. Thousands of volunteers have already used it successfully.

“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.

“Spreading your tax admin throughout the year means avoiding that last minute scramble to complete a tax return every January. Go to GOV.UK and start preparing today.”

Thousands of sole traders and landlords have already enrolled in MTD for Income Tax, with more than 12,000 quarterly updates successfully submitted via a voluntary testing programme.

Those joining MTD this month will still file their tax return for the 2025 to 2026 tax year in the usual manner by 31 January 2027, as this covers the period prior to MTD commencing.

The first MTD tax return, covering the 2026 to 2027 tax year, will be due by 31 January 2028.

To ease the transition, the government has confirmed that customers joining MTD for Income Tax in April will not receive penalty points for late quarterly updates during the first 12 months.

Under the new system, penalty points will be issued for each late submission, with a £200 fine only applied once four points have been accumulated. This means the occasional oversight will not result in an immediate financial penalty.

HMRC is urging those within the scope of MTD for Income Tax to act promptly: read the guidance, select suitable software and sign up via GOV.UK.

Those who use a tax agent are advised to consult them about getting prepared.