MTD income tax will be phased in from April 2026 for individuals with self-employment and/or property income. The start date depends on the individual’s total sales and rental income from those activities.  

An individual must comply with MTD income tax: 

• from 6 April 2026, where their annual turnover exceeds £50,000; and
• from 6 April 2027, where their annual turnover exceeds £30,000.  

The figures from the individual’s income tax return for 2024/25 will be used to determine if they must comply with MTD income tax from 6 April 2026. See details of how the turnover test is applied. 

Contact from HMRC 

In its latest Agent Update, HMRC says that it has identified the taxpayers who may need to comply with MTD income tax from April 2026 and that it will begin to inform them of the possible requirement, from April 2025. HMRC has carried out its provisional assessment based on the income tax self assessment returns for 2023/24.  

Taxpayers within MTD income tax from 6 April 2026 will need to sign up; HMRC will not do this automatically. HMRC has reminded agents that it is possible to sign up for MTD income tax now. Currently, agents have the option of signing up clients for 2024/25 onwards. From April 2025, clients can be signed up for either 2025/26 onwards or from 2026/27 onwards.  

Caroline Miskin, Senior Technical Manager – Digital Taxation, ICAEW, said: “From April 2025, agents can expect to receive more queries from clients about MTD income tax,  prompted by these letters from HMRC. There are two different versions of the letter – one for taxpayers who are eligible to join immediately and another for those that can’t yet join or whose turnover is between £45,000 and £50,000.” 

“HMRC is also planning some paid advertising, targeting the construction sector. It is important to remember that the requirement to comply will ultimately be based on the 2024/25 return and it would be well worthwhile to include an MTD check as those returns are completed from April.” 

“It is important that agents understand what is involved so that they can communicate this to their clients and begin to prepare their practices for what will be a very significant change. Firms may want to consider signing up a client or two for the testing phase to get hands on experience, but great care is needed to choose software that will be ready for quarterly updates and, most importantly, the year-end finalisation process.” 

Help and support 

HMRC is hosting a series of MTD income tax events for agents and software developers across the UK. HMRC says that, at the events, attendees will learn more about MTD income tax, including the testing phase, and be able to ask MTD-related questions. 

Registration is now open for the following events (all 11am to 3pm): 

• Wednesday 9 April 2025 – Newcastle
• Tuesday 29 April 2025 – Stratford
• Wednesday 7 May 2025 – Cardiff 

See HMRC’s Agent Update for details on how to register.   

It is also now possible to register for ICAEW’s MTD Live event, which will take place at Chartered Accountants Hall on 28 April 2025.  

For ICAEW guidance on MTD income tax, from simple explainers and videos to detailed guidance, see the hub. In her latest article for ICAEW on preparing for MTD for income tax, Rebecca Benneyworth looks at the issues to consider in deciding whether to join the testing phase.