HMRC warns of April 2026 deadline for Making Tax Digital

HMRC will expand Making Tax Digital from April 2026 to require many sole traders and landlords to keep digital records and submit quarterly updates, with new penalty-point rules announced and a temporary easing for 2026/27.

HMRC is expanding its Making Tax Digital programme, with new rules due to begin in April 2026. Officials describe the change as the biggest transformation to Self Assessment since 1997. The rollout will be phased and will affect sole traders and landlords who meet the income thresholds. Penalty reform is being introduced alongside the new reporting requirements. Key details: - Phasing and thresholds: from April 2026 those with £50,000 or more gross income in 2024/25 must join; the threshold drops to £30,000 from April 2027 for the current tax year, and the government intends to extend coverage to those earning £20,000 or more for 2026/27. - Reporting and records: affected sole traders and landlords will need compatible software to keep digital records of self-employment and property income and outgoings, submit quarterly updates to HMRC, and file a tax return with any outstanding tax due by January 31. - Penalties and transition: HMRC says the new penalty-reform system will assign points for late quarterly updates or returns and is changing late payment penalties to be more proportionate; it has confirmed it will not issue penalty points for late quarterly updates in the 2026/27 period. Summary: The change will bring around three million people into a digital reporting system and represents a phased update to how Self Assessment is recorded and reported. The first legal requirement begins in April 2026 with the £50,000 threshold, followed by a lower threshold in April 2027 and planned wider coverage thereafter. HMRC has set out penalty reform but has announced an exemption from penalty points for late quarterly updates during 2026/27.