UK tax update underway

HMRC plans quarterly digital updates for those earning over £50,000 from self employment or property.

UK requires quarterly tax updates for self employed landlords

HMRC will require quarterly digital updates for self employed workers and landlords earning more than £50,000 a year. The first three‑month reporting period runs from April 6 to July 5, with the deadline due August 7, 2026. The change sits under Making Tax Digital and asks taxpayers to keep digital records and report income and expenses every three months using HMRC compatible software. The threshold is based on gross income, not profit, and around 780,000 people are expected to be affected in this first wave.

Penalties are clear: late submissions start with a £100 fine, then daily charges of £10 for up to £900, plus further penalties of up to £300 or 5% of tax owed after six and twelve months. The scheme will expand in 2027, dropping the threshold to £30,000 and bringing nearly another million taxpayers into the system, and to £20,000 in 2028. People with both property and self employment income will need two sets of records and two quarterly filings. Officials say the aim is to modernise the tax system and improve accuracy, while advisers warn of upfront costs for software and training. HMRC has urged those affected to join its voluntary testing program to work out issues ahead of the deadline and reduce disruption.

The move marks a broader shift toward data driven tax administration and could push the system toward real time reporting. If the rollout goes smoothly, it could lower errors and speed up processing for taxpayers and the tax office alike. But the timetable is demanding for many small operators who must buy software, learn new processes, and continuously manage quarterly deadlines. The risk is that glitches or delays in onboarding could trigger penalties and squeeze cash flow.

As thresholds fall, more people enter the system, which raises questions about fairness and the cost to small businesses. Clear guidance and affordable tools will be essential, and strong outreach from HMRC could determine whether the reform succeeds or becomes a source of frustration. The policy may deliver long term efficiency if managed with care, but the real test is in everyday bookkeeping and timely filing.

Highlights

The coming months will show whether digital tax rules deliver on their promise.