You may have clients who need to change the way they report their income and expenses.
HMRC are changing the way some sole traders and landlords need to report their income and expenses. This will apply to sole traders and landlords with total income from self employment and property of over £50,000 (before expenses or taxes are deducted).
If income from these sources is more than £50,000 in their 2024-25 Self Assessment tax return, they’ll need to use Making Tax Digital for Income Tax from 6 April 2026 (unless they’re exempt).
You’ll need compatible software to use Making Tax Digital for Income Tax. Please ask your client to check with their software supplier. If they do not use software they should buy some or ask your firm to help or both. Income Tax’. Compatible software can help you or your clients to:
- create, store and correct their digital records of income and expenses (from self- employment and property)
- send us their quarterly updates (summaries of their digital records)
- submit their tax return
You should start preparing for this change now.
From April 2025, HMRC will write to you if your 2023-24 Self Assessment tax return shows your income from these sources was close to, or over, £50,000. This letter will let them know that, depending on their income in 2024-25, they may need to use Making Tax Digital for Income Tax.
If you are not sure how you should prepare there’s more information online to help you and your clients.
Please go to HMRC ‘Making Tax Digital for Income Tax.’
- find out if and when your client needs to use Making Tax Digital for Income Tax
- find compatible software
- create an agent services account
- sign up your client for Making Tax Digital for Income Tax
- sign in to your agent services account to manage your clients’ details
- use Making Tax Digital for Income Tax.
How and when to sign up your clients to Making Tax Digital for Income Tax
- sign up now for the 2025-26 tax year to prepare your business and clients and to familiarise yourself with the changes. You and your clients that sign up now will have exclusive access to HMRC’s Making Tax Digital Customer Support Team – they’ll support you with Making Tax Digital for Income Tax and help you with some of your clients’ other income tax queries
- sign up for the 2026-27 tax year
You should discuss the options with your clients and agree which one to choose.
Kind regards,
Howard Gross BFP FCA FCCA CTA<
Director
