The government’s Making Tax Digital (MTD) programme is set to transform how millions of self-employed individuals and landlords report their income—starting from April 2026. One of the biggest changes is the withdrawal of HMRC’s free tax filing software, which was used by 4.5 million taxpayers in the 2023–24 tax year.
From now on, anyone within the scope of MTD for Income Tax will be required to use third-party commercial software to keep their records and submit quarterly updates to HMRC, as well as complete an annual final declaration.
This change will particularly affect sole traders and landlords earning above £50,000 from April 2026, followed by those earning over £30,000 in 2027, and then those earning more than £20,000 by 2028. In time, this will likely replace the traditional Self Assessment system for most non-PAYE taxpayers.
The Low Incomes Tax Reform Group (LITRG) has raised concerns about the increased costs and complexity for lower-income taxpayers—many of whom don’t currently use accountants and may struggle to navigate new software on their own. Although HMRC has suggested that some free software options will be available, these are extremely limited and may not offer the level of functionality or support many users need.
At Jermyn & Co. Chartered Accountants, we recognise that this shift could be confusing, time-consuming, and overwhelming—especially for clients who are used to managing their tax affairs themselves. However, with the right support, it can also be an opportunity to improve how you manage your finances, stay organised, and avoid last-minute tax stress.
We are here to help you:
- Understand how and when MTD affects you
- Choose the right MTD-compliant software (or let us manage it for you)
- Stay on top of quarterly reporting requirements
- Maximise tax efficiency with professional guidance
- Avoid penalties and costly mistakes
If you’re currently filing your own tax return using HMRC’s free service, now is a great time to start thinking ahead. With MTD just around the corner, we can support you in making a smooth transition to digital record keeping and reporting—without unnecessary stress or expense.
Feel free to get in touch to discuss how we can tailor our services to suit your needs as these changes come into effect.