HMRC is moving ahead with Making Tax Digital (MTD) for Income Tax, which will start on 6 April 2026. New draft legislation was published on Legislation Day, outlining a few updates, but the core rules remain the same. 

Here’s what’s changed: 

• More people will be exempt, including: 

• Ministers of religion 

• Lloyd’s underwriters 

• People who receive the Blind Person’s Allowance 

• People who act as Power of Attorney donors 

• Some types of income are now excluded from MTD rules, such as: 

• Qualifying Care Income (e.g. foster care income) 

• UK income of non-resident entertainers and sportspeople (as long as they don’t have other MTD-eligible income) 

• Year-end tax returns must now be submitted using MTD-compatible software. 

A new term to know: ‘Latency’ 

This refers to when someone starts a new business. They won’t need to follow MTD rules straight away – instead, they’ll join from the 6 April following the tax year in which they first had to file a return. 

Example: 

If you start a new trade in December 2026, you would file a return by January 2028 (for 2026/27) and you would need to follow MTD rules for that new trade from April 2028. 

Who will be affected first? 

If your combined income from self-employment and property is over £50,000 in the 2024/25 tax year, you’ll need to follow MTD rules from 6 April 2026. Those earning over £20,000 will be brought in later. 

What will you need to do under MTD? 

If you’re affected, you’ll need to: 

• Keep digital records using MTD-compatible software 

• Send quarterly income summaries to HMRC through that software 

• Submit your annual return digitally 

These recent changes are mostly small tweaks, the main requirements of MTD for Income Tax remain in place.