Thousands of UK workers told income tax to change from next April - see if you're affected

Thousands of UK workers will be able to keep digital income tax records throughout the year from April, if they reach a certain threshold. The measures, which apply to eligible parties with an annual income of at least £50,000, will require them to use the Government's Making Tax Digital (MTD) from April 6, 20206, in a step towards the implementation of a fully digital UK tax system. The new system will affect an estimated 780,000 people in the UK when it comes into force, with HMRC approximating that a further 970,000 will be eligible from April 2027.

The Government has argued that the MTD initiative will "help businesses [to] work more efficiently and productively, while ensuring everyone pays their fair share". "MTD for Income Tax is the most significant change to the Self Assessment regime since its introduction in 1997," Craig Ogilvie, HMRC's Director of Making Tax Digital said in the spring.

"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."

Landlords and sole traders - or self-employed people who run their businesses single-handedly - will be affected.

The initiative will require those eligible to keep digital records of their income tax, use MTD-compatible software and submit quarterly summaries of their income and expenses to HMRC.

The UK's tax, payments and custom authority has already urged landlords and sole traders to sign up to a testing programme and start preparing for the change now.

"By signing up to our testing programme, self-employed people and landlords will be able to familiarise themselves with the new process and access dedicated support from our MTD Customer Support team, before it becomes compulsory next year," Mr Olgivie said.

James Murray, Exchequer Secretary to the Treasury, added: "MTD for Income Tax is an essential part of our plan to transform the UK's tax system into one that supports economic growth.

"By modernising how people manage their tax, we're helping businesses work more efficiently and productively while ensuring everyone pays their fair share."