HMRC has warned UK households that there are “just six months to go” before a significant income tax change takes effect. Tax returns will undergo a major transformation with a new way to record and report your income and expenses, known as Making Tax Digital for Income Tax (MTD for Income Tax).
Writing on X, HMRC stated:
“There’s just 6 months to go until Making Tax Digital for Income Tax. From April 2026, there will be a new way to report income from self-employment and property to us. Check if you need to sign up for the next tax year.”
This change marks the biggest shift since HMRC launched Self Assessment more than 30 years ago.
### What Are Quarterly Updates?
As part of the new system, you’ll need to submit quarterly updates. HMRC explains:
“They’re just simple summaries of how your business is doing, in four smaller chunks, pulled from your records. If you’re logging information as you go along, quarterly updates will simply be the touch of a button.”
After sending each update, you will be able to see an estimate of your tax bill to help you plan ahead.
### End-of-Year Tax Summary and Less Paperwork
HMRC adds that software will tally up the whole year from your quarterly updates to create an end-of-year tax summary automatically. This means less form filling for taxpayers.
You will still have the chance to make any adjustments before submitting your final tax return, such as including other sources of income like bank interest or pensions, and claiming any eligible tax reliefs. The completed tax return will be sent directly to HMRC through the software, streamlining the process.
### What Won’t Change?
It’s important to note that the new system will not change how you pay Income Tax or the dates you need to make payments.
### Why Is This Happening?
Making Tax Digital is part of the UK government’s ongoing goal to modernise the tax system and reduce the tax gap — the difference between what tax should be paid and what is actually paid.
### Important Information for Partnerships
HMRC clarifies:
“You do not need to use Making Tax Digital for Income Tax for the partnership. You’ll continue to do a Self Assessment tax return. However, if you have income from self-employment or property outside the partnership, and your turnover from these sources meets the qualifying thresholds, you will need to use the new service.”
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Make sure to check if you need to sign up and prepare ahead of the April 2026 deadline to stay compliant with the new requirements.
https://uk.news.yahoo.com/hmrc-warns-uk-households-six-082100107.html