Need to know
HMRC is rolling out the change in phases and the Treasury has issued a fresh update to MPs
James Murray, Financial Secretary to the Treasury(Image: Parliament TV)
HMRC update on major tax system overhaul that will affect millions: what you need to know
- HMRC has issued a new update on the biggest transformation to the UK’s tax system in over three decades with the rollout of Making Tax Digital for Income Tax.
- The new system will replace the traditional annual tax return – filled out by around 11 million Brits each year – with a continuous process spread throughout the year. HMRC has described it as the most significant shake-up since Self Assessment was launched more than 30 years ago.
- The programme will be introduced in phases, starting from 6 April 2027 for businesses with turnover above £30,000. From 6 April 2028, it will extend to those with turnover above £20,000.
- James Murray, Financial Secretary to the Treasury, said: “Making Tax Digital for Income Tax is being introduced gradually, with taxpayers joining in phases according to their level of qualifying income.”
- HMRC is supporting the transition through targeted marketing campaigns and multi-channel engagement with taxpayers, agents and software developers. Partnerships will also be required to adopt the system, with timelines to be confirmed later.
- In a separate and unusual development, HMRC clarified that property inspection staff follow professional conduct guidance requiring “tactful, courteous and respectful” behaviour during council tax valuations after being asked whether staff would take off their shoes if asked.
- READ THE FULL STORY: HMRC Monday update on 2027 income tax change – £30,000 is next step
