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Find out more'What does making tax digital actually mean?'
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I’m self-employed and I understand that I’m going to need to make a big change to the way I report my tax.
Can you please explain the new Making Tax Digital requirements?
Eddy from Nottingham
'You'll need to submit tax updates every three months'
Mike Croxford, Which? Money expert, says...
Making Tax Digital requires you to use software to record accounts and to submit tax updates every quarter, rather than once a year, as previously required.
This will soon apply to people who are self-employed sole traders or landlords, from 6 April 2026 if you have an annual income from self employment, or property income, or the two combined, of more than £50,000 and from 6 April 2027 if the income is more than £30,000.
These limits apply to the gross income, not net. In other words, the amount of rent or invoiced income that you receive before you subtract your costs.
This will soon apply to people who are self- employed sole traders or landlords
It’s expected that this minimum income level will be regularly reviewed and could change in the future.
You can find software that’s compatible with HMRC using their list.
The only automatic exemptions are for those who don’t have a UK National Insurance number or if you’re a foster carer.
You can apply for an exemption if you live in a remote area with poor broadband access or if you struggle to use electronic communications due to your age or a disability. Call or write to HMRC to apply.
- Find out more: How rental income is taxed
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