HMRC have clarified the best routes to notify them when all of a sole trader or landlord's Making Tax Digital (MTD) relevant income has ceased before April 2026. This can be done via webchat or telephone by the taxpayer or their agent.
Mandation into Making Tax Digital (MTD) for Income Tax for taxpayers is based on the amount of qualifying sole trade and property income included in their 2024-25 tax return. Some taxpayers may have ceased some or all MTD-relevant income before 6 April 2026, their MTD start date.
What if all MTD sources of income have ceased?
- HMRC have confirmed that taxpayers and their agents can use HMRC's webchat or telephone service to notify them of the cessation.
- When contacting HMRC, it is important to make it clear that all MTD sources of income have ceased.
- It is also possible to notify HMRC in writing, but they recommend using their webchat or telephone service.
- HMRC will subsequently send a letter confirming that use of MTD is no longer required.
- HMRC have advised that there may be a delay in sending the letter.
- Where the agent makes contact, the letter will be sent to the taxpayer and the agent.
- Where the taxpayer makes contact, the letter will only be sent to the taxpayer.
What if one or more MTD sources of income will continue?
A cessation for MTD will only apply when all sources of qualifying MTD income have ceased.
- If one or more streams of self-employment or property income have ceased, but at least one stream continues, the taxpayer will still need to start using MTD from 6 April 2026.
- It will be possible to enter the end date of the ceased business using HMRC online services or the agent services account.
- Any cessations will also need to be confirmed on the taxpayer's 2025-26 tax return.
HMRC have confirmed that they will be updating their 'Use Making Tax Digital for Income Tax' guidance for this change.
Useful guides on this topic
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Making Tax Digital: Planner & Timeline
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Setting up as a tax agent
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