Self-employed workers warned about upcoming tax changes

HM Revenue and Customs (HMRC) is warning self-employed workers about upcoming changes to income tax. These changes will take effect on April 6, 2026. They will affect anyone earning more than £50,000 from self-employment or property. Currently, self-employed individuals with a qualifying income of £30,000 or less do not have to follow the Making Tax Digital for Income Tax rules. This threshold will increase to £50,000 starting in 2026. From that date, if a self-employed person's income exceeds £50,000 for the 2024-2025 tax year, they must use the Making Tax Digital service. The government also plans to make this service mandatory for partnerships in the future, but no specific date has been announced yet. Self-employed individuals who have not yet submitted their first Self Assessment tax return will not be affected by these changes. However, they can choose to sign up for Making Tax Digital voluntarily. After filing a Self Assessment return for the 2024-2025 tax year by January 31, 2026, HMRC will check if the qualifying income exceeds £50,000. If it does, individuals will receive a letter from HMRC, instructing them to start using the Making Tax Digital service. Tax agents can assist with this process. Some individuals may be automatically exempt from using the Making Tax Digital service. This includes non-resident company persons without a National Insurance number and certain trustees. Others may apply for exemption if using the software is impractical or if they belong to a religious society that opposes electronic records. More details about exemptions can be found on the GOV.UK website.