HMRC Updates Rules on New Tax Reporting System

HMRC has clarified the new tax system rules.

HMRC has explained its rules. Many taxpayers must use a new digital system over the next few years.

A customer asked HMRC about Making Tax Digital on social media. It's a new initiative for sole traders and landlords to submit quarterly returns.

The taxpayer asked if the yearly self-assessment for CIS workers is changing.

The taxpayer asked for a link to get updates. CIS is when a contractor deducts tax from a subcontractor's payment. HMRC said those meeting the income threshold must use Making Tax Digital.

Those with income over £50,000 in 2024/2025 must use Making Tax Digital from April 6, 2026.

This rule is being extended to more people. From April 2027, those with income above £30,000 in 2025/2026 must register.

The Government plans to introduce legislation for those earning over £20,000 in 2026/2027 from April 2028.

The taxpayer asked about qualifying income in their situation. They worked on a PAYE basis, then switched to CIS in January.

HMRC has clarified the new tax system rules.

The taxpayer asked if they qualify for Making Tax Digital. HMRC responded with the rules.

HMRC said PAYE income doesn't count towards qualifying income. Those without CIS work in 2024/25 don't need to start using Making Tax Digital this April.

Taxpayers need to calculate their CIS income from January to April 2026. If it's over £30,000, they must use Making Tax Digital from April 2027.

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