Some big changes are coming for people who are either Self Employed or receive a rental income.
From April 2027, taxpayers with more than £50,000 of gross income from self-employment or rental income in the 2024-25 tax year will need to comply with Making Tax Digital rules which will replace self assessment.
In short, people in that category will now need to keep digital records using approved software and submit quarterly income and expense summaries to HMRC. There is no more waiting to file returns at the end of January, the submissions being more regular. HMRC wont be providing the software, meaning you’ll need to buy or subscribe to approved commercial tax software.
The threshold for having to have digital records drops to £30,000 from April 2027 then £20,000 from April 2028, i.e those earning less than £20,000 won’t have to ever go digital.
“Making Tax Digital is the biggest tax change since self assessment and, with just over two months to go, time is running out to get ready,” said Victoria Todd, of the Low Incomes Tax Reform Group.
If you think this applies to you or want to know more, there’s a great helpful guide here https://www.litrg.org.uk/making-tax-digital-income-tax
