Making Tax Digital for income tax call to action

Making Tax Digital (MTD) for income tax commences in just over two months’ time from 6 April 2026 for sole traders and landlords with gross ‘qualifying income’ (combined income from trading and property before any deductible expenses) above £50,000. Are you ready for this change in UK tax administration? If not, now is the time to prepare. To assist you in your preparations, the Institute recently launched its MTD hub, a one stop shop of resources developed by the Institute to assist members and taxpayers in their preparations. The hub also contains the latest news and links to HMRC resources and guidance. You can also watch our video on the MTD hub here.

Yesterday HMRC wrote to the Institute reiterating the importance of taking steps to prepare now ahead of the first tranche of mandation. It also asked us to share links to some important HMRC resources:

• MTD agent step by step guide,
• Register for specialist MTD support – these sessions provide agents with direct access to HMRC specialists that can provide tailored MTD readiness agent support,
• HMRC communications resources – these resources can be used to align your practice’s MTD messaging with what clients may see from HMRC and also provide ready-made products you can use to educate clients, and
• Sign up for a HMRC MTD webinar – these webinars cover planning steps, actions to take now, how to sign-up clients for April 2026 and answers to questions. The first webinar is scheduled for Wednesday 11 February 2026.

Are you looking for the top tips on how to get ready? Check out HMRC’s new MTD agent toolkit. This aims to provide a practical aid to help guide agents through this journey in a logical order so that agents can be confident that they and their clients will be ready ahead of April 2026. The new toolkit includes help with understanding the changes, planning (including “segmenting clients”), preparing the practice (including the “service offer”), preparing clients (including a conversation checklist tool) and helpful resources including videos and webinars. Alongside this, the agent-specific content on HMRC’s MTD campaign page is also being updated to provide agents with a dedicated resource which will provide a clearer more streamlined journey and direct access to tailored guidance and resources.

HMRC has also recently updated its guidance on the various MTD for income tax exemptions which are available as follows:

• Find out if you can get an exemption from Making Tax Digital for Income Tax – this page now contains the full list of exemptions from MTD for income tax, and
• Apply for an exemption from Making Tax Digital for Income Tax which explains the exemption applications process if a taxpayer is not automatically exempt.

HMRC is keen to stress that as with all its MTD guidance, guidance will continue to be iterated ahead of April 2026 to ensure that policy and legislation are clearly reflected. As a result, we recommend that members bookmark these pages and regularly check for the latest updates which will also be covered in Chartered Accountants Tax news and on our MTD hub.

For any taxpayers currently participating in MTD testing, HMRC is highlighting an issue with how payments on account (POAs) for 2025/26 and 2024/25 balancing payments of income tax and Class 4 NIC for self-assessment (SA) are treated. As the information for these taxpayers is split between different HMRC systems, any 2024/25 balancing SA payment remains within HMRC’s non-MTD system, whilst 2025/26 SA POAs are within the new MTD system. Because of this, some taxpayer statements show SA POAs as “transferred to digital” or “nil” and therefore do not show the full picture of any payments which were due on 31 January 2026. Taxpayers should access both the MTD service and the legacy SA service from within their Personal Tax Account (PTA) or Business Tax Account (BTA) to see the total balance which fell due.

To address this, HMRC issued a letter explaining this issue to those affected which explained where to find their SA POAs information and how to work out what they still needed to pay. The letter also explained that POAs marked as “transferred to digital” were still due for payment by 31 January and what needed to be done if these did not appear in their MTD account. This is particularly important as interest will be charged on any amounts not paid by the 31 January 2026 due date.

A message was also placed in the taxpayer’s MTD account advising them to check their SA online account. Agents should also ensure that they check both systems before advising clients. HMRC advises that work is already underway on longer term solutions for this issue for the future.