HMRC warning to people earning over £50,000 ahead of new tax shake-up

A major overhaul is on the way for landlords and sole traders, with hundreds of thousands set to be affected. From April 6, 2026, anyone earning over £50,000 from self-employment or will need to follow new Making Tax Digital (MTD) rules - meaning they'll have to keep digital records and submit updates to HMRC every quarter.

Around 780,000 people are expected to be impacted in the first phase, with another 970,000 joining from April 2027. Then in 2028, the rules will extend further as the earnings threshold drops to £30,000, and later to £20,000. Crucially, the income threshold is based on total earnings, not profit. Britons are being urged to start getting to grips with the changes now, after a new survey revealed many don't feel ready for what's to come.

A new survey by found that four in five accounting professionals think MTD for income tax is the "biggest challenge" of the next 12 months.

One in three accountants admitted they felt unprepared for the change, while one in 10 said they were "very unprepared".

This comes as just 3% of self-employed people say they are currently using the required third-party software to submit their tax returns.

HMRC said the move aims to improve accuracy, reduce errors, and save people time.

Early adopters are being encouraged to join HMRC's MTD testing programme. Craig Ogilvie, director of Making Tax Digital at HMRC, said: "With April 2026 on the horizon, we are issuing letters to customers we believe will be mandated, outlining specific requirements and timelines.

"We urge those who meet the mandate criteria to join our testing programme on now to help shape the final service and make your transition smoother."

Caroline Hobden, portfolio event director of added: "There is a wealth of financial software platforms and AI tools available, even on the Government's list of approved MTD software, and each platform will work differently. Take all your learning, data and research and think about what your ideal software does so that when you're trying them out, you don't lose sight of your end goal."

You can check the Government's list of approved MTD software .