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A significant change to how sole traders and landlords report their income tax is coming on April 6, 2026. If you earn over £50,000 from self-employment or property, you’ll need to switch to digital record-keeping and quarterly updates. It's crucial for North Belfast's small business community to start preparing now.
2026/02/05
Attention North Belfast sole traders and landlords! A major change is on the horizon for how you manage your tax affairs, and it's time to get ready. From April 6, 2026, if you earn more than £50,000 annually from self-employment or property, you’ll be required to use Making Tax Digital (MTD) for Income Tax.
This means a shift from traditional annual tax returns to keeping digital records and sending 'light-touch' quarterly updates of your income and expenses to HM Revenue and Customs (HMRC) using recognised software. It's important to note these quarterly updates are not extra tax returns but rather a way to spread your tax administration throughout the year, making the final annual submission much smoother.
The aim of MTD is to simplify tax reporting, reduce common errors, and prevent that stressful last-minute scramble to gather receipts and records before the January 31st deadline. Thousands of sole traders and landlords have already successfully tested the system through a voluntary programme, confirming its straightforward nature.
HMRC is providing extensive support to help everyone transition. This includes free online guidance, webinars, and helpful videos. There are also free software options available, and for those who genuinely cannot use digital tools, it is possible to apply for an exemption.
While the MTD system starts in April 2026, you will still file your tax return for the 2025 to 2026 tax year in the usual way by January 31, 2027. The first official MTD tax return, covering the 2026 to 2027 tax year, will then be due by January 31, 2028.
To support businesses during this transition, HMRC has announced that for the first 12 months, starting April 2026, customers joining MTD for Income Tax will not receive penalty points for late quarterly updates. Under the new system, penalty points will be issued for each late submission, but a £200 penalty will only apply once four points are accumulated, allowing for occasional slip-ups without immediate fines.
If you believe you'll be affected by these changes, don't delay. Now is the time to act. We encourage all eligible North Belfast sole traders and landlords to visit GOV.UK for detailed guidance, choose suitable software, and sign up. If you use a tax agent, be sure to speak with them about how best to prepare.