Making Tax Digital gets simpler

There are significant Making Tax Digital (MTD) simplifications planned, being introduced in 2026. These changes include no End of Period Statement (EOPS), cumulative submissions each quarter and restrictions for complex situations.

Who does this apply to?

Taxpayers with turnover over £50,000 will be brought into MTD Income Tax Self-Assessment (MTD ITSA) from April 2026.

The £50,000 threshold applies to gross total self-employment and property income. From April 2026, all your self-employment and property income sources will be included when determining whether MTD ITSA will apply to you.

Taxpayers with turnover over £30,000 will be brought into MTD ITSA from April 2027.

HMRC has confirmed that self-employed taxpayers and landlords with turnover under £30,000 will not be brought into MTD ITSA in April 2027. This decision will be kept under review so this group could be included in MTD ITSA in the future.

How will it change your reporting?

To simplify year-end reporting, the requirement for taxpayers to file an EOPS in addition to the final declaration has been removed. The EOPS will instead be built into the final declaration process, which pulls together the information that would have been reported on the EOPS as well as other data to calculate the final tax position.

New MTD ITSA exemptions have been announced for foster carers and those unable to get a National Insurance number.

Quarterly updates produced under MTD ITSA will be cumulative. This means that any errors in previous quarterly submissions can be corrected in the next quarter, rather than having to go back and resubmit earlier reports.

Finally, the expansion of the cash basis for calculating taxable profits should result in simpler reporting for MTD purposes.

If you have questions about Making Tax Digital and how it affects your accounting, please get in touch with our experts.