MTD for Income Tax kicks off in April 2026 for those earning over £50k. Digital records, quarterly updates, and tougher penalties are on the way. If this affects you, it’s time to get ready.

Designed to modernise the tax system and improve accuracy, MTD will significantly change how Income Tax is reported and paid. With less than a year until the first group of taxpayers must comply, now is the time to prepare.

MTD for Income Tax will become mandatory for self-employed individuals and landlords with annual business or property income exceeding £50,000 from April 2026,. This will require taxpayers to submit quarterly updates to HMRC, maintain digital records, and comply with a new penalty regime for late submissions and payments.

The second phase of implementation will begin in April 2027, extending the requirements to those earning between £30,000 and £50,000. In a further expansion announced during the Spring Statement 2025, MTD obligations will apply to sole traders and landlords with income over £20,000 starting April 2028. The government has also indicated that it is considering the best approach for individuals earning below this threshold.

HMRC is currently contacting taxpayers whose 2023–24 self-assessment returns indicate income near or above the £50,000 threshold. These letters are intended to provide advance notice of upcoming obligations under MTD.

Swapped an old fridge or carpet in your rental property? Landlords can claim tax relief on replacing domestic items – but not if it's an upgrade! Know the rules and save money by claiming what you are entitled.

The replacement of domestic items relief allows landlords to claim tax relief when they replace movable furniture, household appliances, and other domestic items in a rental property. This relief is available for various items, including free-standing wardrobes, carpets, curtains, televisions, fridges, and crockery.

The amount of the deduction depends on several factors:

• The cost of the new replacement item, which is limited to the cost of an equivalent item if it represents an improvement over the old one (i.e., beyond the reasonable modern equivalent); plus
• the incidental costs associated with disposing of the old item or acquiring the replacement; minus
• any amounts received from disposing of the old item must be deducted from the total claimable amount.

A key aspect of this relief is distinguishing between a "replacement" and an "improvement." If the new item is deemed an improvement over the old one, the allowable deduction is limited to the cost of purchasing an equivalent item of similar type and function.

HMRC’s internal guidance provides an example highlighting the fact that a brand-new budget washing machine costing circa £200 is not an improvement over a 5-year-old washing machine that cost around £200 at the time of purchase (or slightly less, considering inflation).

If the replacement item is a reasonable modern equivalent, such as replacing an old fridge with a new energy-efficient model, this would not be considered an improvement, and the landlord can claim the full cost of the new item under the relief.

This relief helps landlords offset the costs of maintaining and upgrading rental properties, provided the replacement is for an equivalent item rather than an enhanced or more expensive upgrade.

Child Benefit has risen for 2025–26: £26.05 for eldest, £17.25 for others. Claim continues to age 20 in approved education. HICBC still applies for incomes over £60K – but PAYE option coming this summer!

The child benefit rates for the only or eldest child in a family increased to £26.05 (from £25.60) for the 2025-26 tax year and the weekly rate for all other children to £17.25 (from £16.95). Child Benefit is usually paid every 4 weeks and will automatically be paid into a bank account. There is no limit to how many children parents can claim for.

Taxpayers entitled to the child benefit should be aware that HMRC usually stop paying child benefit on the 31 August following a child’s 16th Birthday. Under qualifying circumstances, the child benefit payment can continue until a child reaches their 20th birthday if they stay in approved education or training. A qualifying young person is someone aged 16,17, 18 or 19 in full time non-advanced education or in approved training.

Any parents with children that remain in approved education or training should contact the child benefit office to ensure they continue receiving the child benefit payments to which they are entitled. No child benefit is payable after a young person reaches the age of 20 years.

Child benefit is usually payable for children who come to the UK. However, there are a number of rules which must be met in order to claim. HMRC must be notified without delay if a child receiving child benefit moves permanently abroad.

The High Income Child Benefit Charge (HICBC) currently applies to taxpayers whose income exceeds £60,000 in a tax year and who are in receipt of child benefit. The HICBC is charged at the rate of 1% of the full child benefit award for each £200 of income between £60,000 and £80,000. For taxpayers with income above £80,000 the amount of the charge will equal the amount of child benefit received.

The HICBC therefore either reduces or removes the financial benefit of receiving child benefit. It was announced as part of the Spring Statement measures that from this summer, families will have the option to report their Child Benefit payments and pay the HICBC directly through their PAYE tax code instead of filing a self-assessment tax return.

Do you know what your 2025–26 tax code means? It affects how much tax is taken from your pay or pension. Check now to make sure you're on the right code and not overpaying! Here's what the letters and numbers really mean.

You can find your tax code:

• by checking your tax code for the current year online – you’ll need to sign in to or create an online account
• on the HMRC app
• on your payslip
• on a ‘Tax Code Notice’ letter from HMRC if you get one

The tax codes are updated annually. The basic personal allowance for the 2025-26 tax year is £12,570. The corresponding tax code for an employee entitled to the standard tax-free Personal Allowance 1257L. This is the most common tax code and is used for most people with one job and no untaxed income, unpaid tax or taxable benefits (for example a company car).

There are a lot of other numbers and letters that can appear in your tax code. For example, there are letters that show where an employee is claiming the marriage allowance (M) or where their income or pension is taxed using the Scottish rates (S). If your tax code numbers are changed this usually means your personal allowance has been reduced.

There are also emergency tax codes (W1 or M1) which can be used if a new employee doesn’t have a P45. These codes mean that an employee’s tax calculation is based only on what they are paid in the current pay period.

If your tax code has a 'K' at the beginning this means that deductions due for company benefits, state pension or tax owed from previous years are greater than your personal allowance. However, the tax deduction for each pay period can’t be more than half your pre-tax pay or pension.

It is important to check your 2025-26 tax code to ensure the correct information is being used. 
 

Couples who jointly own rental property are usually taxed 50:50, even if they own different shares. But if you're married or in a civil partnership, Form 17 lets you split income based on actual ownership—provided you meet HMRC's rules.

The standard tax treatment for couples living together, whether married or in a civil partnership, is that property income held jointly is split 50:50, regardless of the actual ownership proportion.

However, if the ownership is unequal and the couple wishes to have the income taxed in line with their respective shares, they must notify HMRC and provide evidence of the unequal beneficial interests in the property. This is done by submitting Form 17, which declares the beneficial interests in joint property and income.

A Form 17 declaration can only be made by spouses or civil partners living together who own property in unequal shares, with the income allocated in proportion to these shares. Couples who are separated or in other types of relationships are not eligible to submit a Form 17 declaration.

The declaration is only valid if both partners agree. If one partner disagrees, the income will continue to be split 50:50, regardless of the ownership structure.

Once submitted, a Form 17 declaration remains in effect until there is a change in the couple's status, such as separation or divorce, or a change in the ownership structure. If either of these occurs, the 50:50 income split will be reinstated.

There are specific situations in which Form 17 cannot be used, such as when spouses or civil partners own property as beneficial joint tenants, income from shares in a close company or for partnership income.

In cases where property is owned in unequal shares, submitting a Form 17 declaration can offer tax benefits under certain circumstances.