Modernising the tax system through Making Tax Digital

This technical note provides further detail on measures relating to Making Tax Digital (MTD) for Income Tax which were announced in the Spring Statement in 2025. These extend MTD to a wider range of customers and introduce various improvements to how MTD works.

It sets out plans to:

• expand MTD for Income Tax to sole traders and landlords with income over £20,000 from April 2028
• exempt or defer certain taxpayer groups from MTD
• improve end-of-year processes by making MTD-compatible software the default for submitting end of year information and Final Declaration (The Tax Return)
• finalise the policy framework for MTD and penalty reform

HMRC will continue to engage with stakeholders on these areas before legislation is introduced before mandation in April 2026.