New rules for self-employed workers and landlords risk creating another “cliff edge” that tempts people to limit their earnings, tax experts have warned.
From 6 April 2026, sole traders and landlords with a qualifying income of more than £50,000 must keep digital records and send quarterly summaries of their income and expenses to HMRC under the Making Tax Digital (MTD) rules. The threshold will fall to £30,000 from April 2027 and £20,000 from April 2028.
The updates are not the same as filing four tax returns a year, but experts say confusion over the rules, software costs and the extra admin burden have left some self-employed people wondering whether it is worth staying below the threshold – even though doing so is considered unwise by tax specialists.
HMRC says around 864,000 individuals will be affected immediately because they have a qualifying annual income of over £50,000, but an extra two million will be hit over the next two years as the threshold falls.
In theory, the new system is being introduced to make the tax system more streamlined and fair, reducing the number of errors and giving the taxman a more real-time overview of people’s finances.
