MTD for Income Tax kicks off in April 2026 for those earning over £50k. Digital records, quarterly updates, and tougher penalties are on the way. If this affects you, it’s time to get ready.

Designed to modernise the tax system and improve accuracy, MTD will significantly change how Income Tax is reported and paid. With less than a year until the first group of taxpayers must comply, now is the time to prepare.

MTD for Income Tax will become mandatory for self-employed individuals and landlords with annual business or property income exceeding £50,000 from April 2026,. This will require taxpayers to submit quarterly updates to HMRC, maintain digital records, and comply with a new penalty regime for late submissions and payments.

The second phase of implementation will begin in April 2027, extending the requirements to those earning between £30,000 and £50,000. In a further expansion announced during the Spring Statement 2025, MTD obligations will apply to sole traders and landlords with income over £20,000 starting April 2028. The government has also indicated that it is considering the best approach for individuals earning below this threshold.

HMRC is currently contacting taxpayers whose 2023–24 self-assessment returns indicate income near or above the £50,000 threshold. These letters are intended to provide advance notice of upcoming obligations under MTD.

Child Benefit has risen for 2025–26: £26.05 for eldest, £17.25 for others. Claim continues to age 20 in approved education. HICBC still applies for incomes over £60K – but PAYE option coming this summer!

The child benefit rates for the only or eldest child in a family increased to £26.05 (from £25.60) for the 2025-26 tax year and the weekly rate for all other children to £17.25 (from £16.95). Child Benefit is usually paid every 4 weeks and will automatically be paid into a bank account. There is no limit to how many children parents can claim for.

Taxpayers entitled to the child benefit should be aware that HMRC usually stop paying child benefit on the 31 August following a child’s 16th Birthday. Under qualifying circumstances, the child benefit payment can continue until a child reaches their 20th birthday if they stay in approved education or training. A qualifying young person is someone aged 16,17, 18 or 19 in full time non-advanced education or in approved training.

Any parents with children that remain in approved education or training should contact the child benefit office to ensure they continue receiving the child benefit payments to which they are entitled. No child benefit is payable after a young person reaches the age of 20 years.

Child benefit is usually payable for children who come to the UK. However, there are a number of rules which must be met in order to claim. HMRC must be notified without delay if a child receiving child benefit moves permanently abroad.

The High Income Child Benefit Charge (HICBC) currently applies to taxpayers whose income exceeds £60,000 in a tax year and who are in receipt of child benefit. The HICBC is charged at the rate of 1% of the full child benefit award for each £200 of income between £60,000 and £80,000. For taxpayers with income above £80,000 the amount of the charge will equal the amount of child benefit received.

The HICBC therefore either reduces or removes the financial benefit of receiving child benefit. It was announced as part of the Spring Statement measures that from this summer, families will have the option to report their Child Benefit payments and pay the HICBC directly through their PAYE tax code instead of filing a self-assessment tax return.

Do you know what your 2025–26 tax code means? It affects how much tax is taken from your pay or pension. Check now to make sure you're on the right code and not overpaying! Here's what the letters and numbers really mean.

You can find your tax code:

The tax codes are updated annually. The basic personal allowance for the 2025-26 tax year is £12,570. The corresponding tax code for an employee entitled to the standard tax-free Personal Allowance 1257L. This is the most common tax code and is used for most people with one job and no untaxed income, unpaid tax or taxable benefits (for example a company car).

There are a lot of other numbers and letters that can appear in your tax code. For example, there are letters that show where an employee is claiming the marriage allowance (M) or where their income or pension is taxed using the Scottish rates (S). If your tax code numbers are changed this usually means your personal allowance has been reduced.

There are also emergency tax codes (W1 or M1) which can be used if a new employee doesn’t have a P45. These codes mean that an employee’s tax calculation is based only on what they are paid in the current pay period.

If your tax code has a 'K' at the beginning this means that deductions due for company benefits, state pension or tax owed from previous years are greater than your personal allowance. However, the tax deduction for each pay period can’t be more than half your pre-tax pay or pension.

It is important to check your 2025-26 tax code to ensure the correct information is being used. 
 

Couples who jointly own rental property are usually taxed 50:50, even if they own different shares. But if you're married or in a civil partnership, Form 17 lets you split income based on actual ownership—provided you meet HMRC's rules.

The standard tax treatment for couples living together, whether married or in a civil partnership, is that property income held jointly is split 50:50, regardless of the actual ownership proportion.

However, if the ownership is unequal and the couple wishes to have the income taxed in line with their respective shares, they must notify HMRC and provide evidence of the unequal beneficial interests in the property. This is done by submitting Form 17, which declares the beneficial interests in joint property and income.

A Form 17 declaration can only be made by spouses or civil partners living together who own property in unequal shares, with the income allocated in proportion to these shares. Couples who are separated or in other types of relationships are not eligible to submit a Form 17 declaration.

The declaration is only valid if both partners agree. If one partner disagrees, the income will continue to be split 50:50, regardless of the ownership structure.

Once submitted, a Form 17 declaration remains in effect until there is a change in the couple's status, such as separation or divorce, or a change in the ownership structure. If either of these occurs, the 50:50 income split will be reinstated.

There are specific situations in which Form 17 cannot be used, such as when spouses or civil partners own property as beneficial joint tenants, income from shares in a close company or for partnership income.

In cases where property is owned in unequal shares, submitting a Form 17 declaration can offer tax benefits under certain circumstances.

Making Tax Digital for Income Tax (MTD for IT) will become mandatory in phases from April 2026. If you’re self-employed or a landlord earning over £50,000, get ready for quarterly updates, digital record keeping, and a new penalty system.

Initially, MTD for IT will apply to businesses, self-employed individuals, and landlords with an annual income exceeding £50,000. From 6 April 2027, the rules will extend to those with an income between £30,000 and £50,000. A new system of penalties for late filing and late payment of tax will also be introduced.

In the Spring Statement 2025, the government confirmed that MTD for IT will apply to sole traders and landlords with income over £20,000 starting in April 2028. The government will also explore how to treat those with income below the £20,000 threshold.

Starting in April 2025, HMRC will begin writing to taxpayers whose 2023-24 self-assessment returns show that their total income from self-employment and property is approaching or exceeds £50,000. These letters will notify them of their obligation to use MTD for IT starting in April 2026.

Although MTD for IT becomes mandatory in 2026, you can opt to sign up voluntarily before then. This allows you to help HMRC test and refine the system while also familiarising yourself with the new rules. While signing up is currently voluntary, there are specific eligibility requirements, and not all taxpayers will qualify. If you are eligible, you can sign up on GOV.UK.

If you volunteer to participate in testing the MTD for IT service, the new penalties for late submissions and late payments will apply. This will replace the existing penalties for the relevant tax years. No penalties will apply for the quarterly updates for volunteers in 2024-25 or 2025-26.

If you're self-employed, lenders may require an SA302 and tax year overview as proof of earnings for mortgages or loans. These documents verify income declared on your self-assessment tax return and are easily accessible via HMRC. Learn how to obtain them.

The use of these forms has become more widespread since mortgage regulations began requiring self-employed individuals to provide verifiable evidence of income. The SA302 serves as proof of income for the last four years of self-assessment tax returns.

The SA302 document provides a detailed breakdown of the income reported on the taxpayer’s self-assessment tax return, including commercial versions of the tax return. Meanwhile, the tax year overview confirms the tax due based on the return submitted to HMRC, showing any payments made, and cross-referencing the Tax Calculation with HMRC’s records.

Self-assessment taxpayers can request an SA302 tax calculation through HMRC’s online service. After submitting an online tax return, it typically takes around 72 hours for the documents to become available for printing.

Most lenders will accept an SA302 printed directly from online accounts or from the commercial software used to submit tax returns. HMRC has been actively working with the Council of Mortgage Lenders and its members to expand the number of lenders willing to accept self-serve copies of these documents as valid proof of income.

Maintenance Payments Relief reduces Income Tax for those making court-ordered payments to an ex-spouse or civil partner. To qualify, one party must have been born before 6 April 1935. The relief is 10% of payments, up to £428 per year.

To qualify for this relief, all of the following conditions must apply:

To claim, you must contact HMRC. The process involves providing necessary documentation, such as proof of the court order and payment records.

This benefit is designed to reduce the overall tax burden, helping someone manage their financial responsibilities after a separation.

However, it's important to note that this tax relief is limited due to the age condition — it only applies if either party was born before 6 April 1935, which significantly restricts its usage.

The UK's shift to the Foreign Income and Gains (FIG) regime from April 2025 changes how foreign income is taxed. If you are a UK resident, get ready to possibly pay UK Income Tax on all foreign earnings—no more non-dom remittance basis.

UK Income Tax is generally payable on taxable income received by individuals including earnings from employment, earnings from self-employment, pensions income, interest on most savings, dividend income, rental income and trust income. The tax rules for foreign income can be very complex.

However, as a general rule if you are resident in the UK you need to pay UK Income Tax on your foreign income, such as:

Foreign income is defined as any income from outside England, Scotland, Wales and Northern Ireland. The Channel Islands and the Isle of Man are classed as foreign.

If you are not UK resident, you do not generally have to pay UK tax on your foreign income. There are special rules if you work both in the UK and abroad.

The remittance basis rules which allowed non-UK domiciled individuals (often referred to as non-doms) to be taxed only on UK income and gains, is being abolished. From 6 April 2025, the concept of domicile as a relevant connecting factor in the UK tax system has been replaced by a new residence-based regime known as the Foreign Income and Gains (FIG) regime. 

HMRC has launched a new "Help for Hustlers" campaign to help people who are earning extra income, figure out if they need to pay tax on the additional earnings. The campaign runs until the end of March and focuses on five key areas where tax might apply:

  1. I’m buying or making things to sell.
  2. I’ve got a side gig.
  3. I work for myself with multiple jobs.
  4. I’m a content creator or influencer.
  5. I rent out my property.

The good news is there are two £1,000 tax allowances — one for property income and one for trading income. If you have both types of income, you can claim £1,000 for each.

These allowances cover all relevant income before expenses. If your income is under £1,000, it’s tax-free. If you earn more than £1,000, you can choose to either deduct the £1,000 allowance from your income or list your actual expenses when calculating your taxable profit.

However, if your side hustle income goes over £1,000 in a tax year, you may need to complete a self-assessment tax return. Keep in mind this only applies if you are actively trading or selling services. If you are just clearing out some old stuff and selling it, there is usually no need to worry about tax.

Tax on rental income from jointly owned property depends on ownership shares, unless part of a partnership. Married couples default to a 50/50 split unless they notify HMRC of a different income allocation based on actual ownership proportions.

When property is jointly owned with one or more individuals, the taxation of rental income depends on whether the rental activity is considered a partnership. Simply owning property together does not automatically qualify the arrangement as a partnership.

If the jointly owned property is not part of a partnership, the allocation of any profit or loss from the jointly owned property is typically based on each person's ownership share in the property. However, the co-owners can agree to divide the profits and losses differently than their ownership proportions, so it’s possible for one person to receive a larger or smaller share of the profits or losses than their share in the property itself. For tax purposes, the profit and loss share must reflect the actual agreement made by the owners.

In cases where the joint owners are married or in a civil partnership, the profits and losses are generally treated as being divided equally between them, unless:

If these conditions are met, the profit and loss distribution will follow the agreed-upon ownership percentages, rather than the default equal split for married couples or civil partners.