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HM Revenue and Customs (HMRC) is sending out over 200,000 letters to people who will be impacted by changes to the tax system next year. There are just five months to go until sole traders and landlords with qualifying income over £50,000 will be required to use Making Tax Digital (MTD) for Income Tax. The launch on April 6, 2026 marks a significant and ultimately time-saving change in how these individuals will need to keep digital records and report their income to HMRC. Five months may feel like a long time away, but HMRC is advising customers to get ahead of the game now and join the testing programme. HMRC explained: “It will give you the chance to get comfortable with the new system before it becomes mandatory and access to our dedicated support team - essentially a safety net while you learn the ropes.” HMRC is keen to make people aware the change will not result in anyone having to file extra tax returns. HMRC said: “The required quarterly updates are simple summaries that your software generates automatically. Think of it as digital bookkeeping that talks to HMRC four times a year, rather than cramming everything into January for your Self Assessment return. “If you spot an error, you can fix it in the next update. More than 2,000 updates have been successfully submitted in the testing programme and the feedback from those involved has been encouragingly positive.” HMRC also said customers will need compatible software, but there are free options available as well as ones you have to pay for. The tax body added: “There isn’t a one size fits all - the key is finding which software works for your business. The software will give you real-time estimates of your tax bill throughout the year, helping with cash flow planning and avoiding nasty January surprises. “If you're already using spreadsheets or accounting software, you can get compatible software that connects to your existing records and meets the new requirements.” Making Tax Digital director Craig Ogilvie said: "Tax is changing and with just six months until Making Tax Digital for Income Tax comes into effect, now's the time to start preparing. “MTD is about spreading your tax admin throughout the year instead of that January scramble to complete your Self Assessment return. “There are free software options available, and early feedback from our testing participants shows the system is straightforward once you are familiar with it.” HMRc estimates around 780,000 self-employed individuals and landlords will be required to use MTD for Income Tax from April 2026, with a further 970,000 joining from April 2027 You can sign up for the testing programme on GOV.UK.
