The UK government will shortly be rolling out the Making Tax Digital platform for Income Tax. From April 2026, self-employed individuals and landlords with income over £50,000 will be required to comply. Businesses and individuals can expect a number of benefits from this new digital system, some of which are highlighted below.
When Will I Need To Make Digital Income Tax Submissions?
From 6 April 2026, Making Tax Digital for Income Tax will come into effect for self-employed individuals and landlords with income over £50,000. It’s important to ensure that the software you use for recording and submitting income tax data is compatible with HMRC’s MTD requirements. There is a guide to approved software providers on the government website.
Benefits Of The New Making Tax Digital Regulations
As the new requirements roll out and accounting departments become more familiar with the requirements, quite a few benefits of the new digital system will become more apparent. These benefits will snowball once the entire system is up and running.
Some of the likely benefits include:
1. Accessibility
It will be a real boost for any finance or business executive to have the ability to check VAT returns and HMRC data while out and about and this is easily possible using this new digital system.
2. Real-time Information
Once the entire digital system is up and running, businesses will be able to access real-time data on all taxation which gives instantaneous knowledge about how much tax needs to be paid.
3. Digital Record Keeping Is More Convenient
Once this new cloud system is in place, businesses can interact with HMRC at the most convenient times. It will also become obvious over time that cloud-based tools help business growth and increase profitability.
4. Just One Account For All Business Finances
The Making Tax Digital system means business users will have just one account for all their HMRC interactions. This will make it far easier and quicker to obtain an accurate overview of finances.
5. Errors Will Be Reduced
The government has set a target of cutting down mistakes made on tax returns, as these cost up to £8bn annually. And, furthermore, £3.5bn of this total relates to VAT alone.
It can be seen from the above that the Making Tax Digital system will speed up business returns considerably.