Overview
- Around 900,000 people with self-employment or property income are required to keep digital records and use authorised software to report to HMRC.
- Those affected are individuals who earned more than £50,000 in 2024/25 from self-employment or property income.
- Quarterly summaries are due on August 7, November 7, February 7 and May 7, with a final declaration replacing the annual return due by January 31.
- An IPSE/Sage survey found nearly 40% of sole traders had never heard of the change, only about one in ten use cloud accounting, and software costs are a key concern.
- ICAEW and others cite weak communication and a steep learning curve, while HMRC says digital reporting will improve accuracy and help reduce errors that contribute to the £46.8bn tax gap, with thresholds set to extend to £30,000 in 2027 and £20,000 in 2028.