Copyright walesonline
HM Revenue and Customs ( HMRC ) is sending out letters to more than 200,000 people who will be affected by alterations to the tax system coming into force next year. With only five months remaining until sole traders and landlords with qualifying income exceeding £50,000 must adopt Making Tax Digital (MTD) for Income Tax preparation time is running short. The implementation on April 6, 2026, represents a substantial and ultimately time-saving shift in how these individuals will need to maintain digital records and submit their income to HMRC. While five months might seem distant HMRC is encouraging customers to prepare now and participate in 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 eager to clarify that the change will not mean anyone has to submit additional tax returns, reports the Daily Record . 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 stated that customers will require compatible software though free alternatives exist alongside paid versions. For money-saving tips sign up to our Money newsletter here . The tax authority said: "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." MTD director Craig Ogilvie said: "Tax is changing and with just six months until MTD 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 projects around 780,000 self-employed people and landlords will need to adopt MTD for Income Tax from April 2026 with an additional 970,000 following suit from April 2027.
