HMRC has issued a warning over a deadline following a tax rule change. The Labour Party government has reminded self-traders and landlords who are earning over £50,000 that a new system for self-employed people is now being enforced.
The Making Tax Digital system means taxpayers are required to submit online updates every quarter instead of consolidating everything at tax return time. In a post made to social media platform X, HMRC said: “Making Tax Digital for Income Tax is here. If your combined turnover from property and self-employment is more than £50,000, you’ll need to start keeping digital records and send quarterly updates (first deadline is 7 August). Check if Making Tax Digital applies to you and sign up today.”
It comes as three-quarters of landlords and sole traders who should have signed up to the Labour Party government’s new digital tax system failed to do so by its launch this month, revealing a widespread lack of awareness as the new rules come into force. Figures provided to the Financial Times by HMRC show 864,000 taxpayers should have registered, but eight days after the deadline, just 218,000 had done so.
Josh Toovey, Senior Research and Policy Officer at the Association of Independent Professionals and the Self-Employed (IPSE), said: “We’re concerned but not surprised at how many are yet to register. There’s a significant awareness gap around these requirements, particularly among those who do not have the support of an accountant.”
HMRC has confirmed it will not penalise those who missed the April sign-up deadline, but that there will be no second chances when quarterly reporting begins in early August. Toovey told City A.M. he expects “another wave of registrations ahead of that deadline”, but added more needs to be done to “bring this to people’s attention”.
HMRC said: “We are encouraging all customers who were required to sign up by April 6 to do so as soon as possible and expect sign-ups to rise through the first quarter in advance of the first quarterly update deadline on August 7.”
