Does HMRC's "Making Tax Digital" affect you?

Did you know how much you earn does not only affect how much tax you pay? 

In future, it is likely to affect HOW you (1) account for your gross income and (2) pay your tax. 

This is all part of the Making Tax Digital initiative of HMRC. This blog post is all about what's happened recently and what's coming - and whether you need to know more NOW!

I'm going to say upfront, if you are an amateur artist or a professional not earning very much from your art you have nothing to worry about - for the moment.

However those earning MORE than "not earning very much" MUST get to grips with Making Tax Digital soon. Plus note that they are focused on gross income and not net (more about this below)

Digital record-keeping will deliver time-saving benefits for taxpayers (HMRC)

IN THE NEAR FUTURE, I'm going to be developing a "Making Tax Digital page" in the Tax section of my Art Business Info website - alongside the existing UK Tax Tips for Artists to provide artists with links to useful info.

In the meantime, I'll be blogging about it on here for artists who need to get their heads around it.

Of course, as always (here comes the disclaimer), as law and related online content changes all the time,  I am totally unable to warrant that ANY and/or ALL information is complete and/or

• professional and/or
• up to date and/or
• wholly accurate and/or
• all links lead to the most current information (at the time of writing)

UNLESS I am quoting recent HMRC emails (see below) or HMRC websites with a recent date. 

YOU are solely responsible for making sure that you get the proper advice. Personally, I find the HMRC website provides everything most people need to know - but you do need to read it!

Making Tax Digital

As somebody who completes a self-assessment form each year, I received my Getting ready for Making Tax Digital (MTD) for Income Tax email from HMRC yesterday which very clearly states the timetable for the staged implementation of Making Tax Digital. 

I assume everybody else who makes a self assessment tax return for sole trader income also got the same email. So look in your inbox if you missed it!

If you receive qualifying income from self-employment and/or property, you’ll be legally required to use Making Tax Digital (MTD) for Income Tax – based on the level of qualifying income – from the following dates:

• April‌‌‌ 2026‌‌‌, if your qualifying income is over £50,000 in the‌‌‌ 2024‌‌‌ to‌‌‌ 2025‌‌‌ tax year
• April‌‌‌ 2027‌‌‌, if your qualifying income is over £30,000 in the‌‌‌ 2025‌‌‌ to‌‌‌ 2026‌‌‌ tax year
• April‌‌‌ 2028‌‌‌, if your qualifying income is over £20,000 in the‌‌‌ 2026‌‌‌ to‌‌‌ 2027‌‌‌ tax year (the government has set out plans to introduce legislation to lower the qualifying income threshold to this level)

You can see where this is going. In future, it may also involve people earning less than £20,000 in future years.

THE REALLY IMPORTANT POINT TO NOTE at this juncture is that "Qualifying Income" means GROSS INCOME. 

That's your income BEFORE allowable expenses get deducted.

See Guidance: Work out your qualifying income for Making Tax Digital for Income Tax if you want more info at this stage.

What does it all mean

This is what Craig Ogilvie, HMRC’s Director of Making Tax Digital has to say

MTD for Income Tax is the most significant change to the Self Assessment regime since its introduction in 1997. It will make it easier for self-employed people and landlords to stay on top of their tax affairs and help ensure they pay the right amount of tax.

Another summary (my bold)

If you have qualifying income from property and/or self-employment that is over £50,000 from April 2026, over £30,000 from April 2027 and over £20,000 from April 2028 – you will be legally required to use Making Tax Digital.

This is what the Government has to say (with my bold added)

By keeping digital records throughout the year, sole traders and landlords can save hours previously spent gathering information at tax return time – allowing them to spend more time focusing on their business activities and in turn, driving economic growth as part of the government’s Plan for Change.

Quarterly updates will spread the workload more evenly throughout the year, bring the tax system closer to real-time reporting and help businesses stay on top of their finances and avoid the last-minute rush.

Basically it means staying on top of your tax records throughout the year and doing a return four times a year - via digtal software - rather than once a year with the option of paper.

What help is on offer

There's an upcoming webinar which is going to be very relevant to those who need to get registered for April 2026. It's also likely to be relevant to those whom it will affect later.

This is another extract from the email I got yesterday

How to get ready for MTD if you are a business

Register for this live webinar about getting ready for MTD, during which we’ll look at:
• the requirements of MTD for Income Tax
• practical steps you can take to prepare your business
• the rules, who will be affected and when
• making informed software choices
• authorising your agent, if applicable, and signing up to MTD
• utilising any benefits and opportunities

Making Tax Digital for Income Tax – individual authorisation and enrolment

As part of a dedicated series, register for this webinar to help you navigate the requirements of MTD for Income Tax. We’ll guide you through:
• who’s affected
• when MTD becomes mandatory
• how to sign up early

You’ll also discover the benefits of early enrolment, how to choose compatible software, and what to expect after signing up. Perfect for sole traders and landlords, looking to stay ahead of the‌‌‌ April‌‌‌ 2026‌‌‌ rollout.

There are two dates for the webinar. They are:

• (tomorrow) Friday 22nd August 2025 (9.45am - 10.45am)
• Thursday 4th September 2025 (11.45am - 12.45am)