Over 800,000 workers have just HOURS to meet new tax deadline – check if you’re affected and how to dodge £200 fine

MORE than 800,000 workers have just hours left to meet a new tax deadline – or face a £200 fine. Self-employed workers and landlords who file self-assessment tax returns will have to submit their first quarterly update to HMRC by tomorrow (Friday, August 7). More than 800,000 workers have just hours left to meet a new tax deadline Credit: Alamy It’s part of the government’s new Making Tax Digital scheme which was introduced in April this year. Around 850,000 workers and landlords, with an income above £50,000, are now required to file financial information five times a year – an annual tax return and four quarterly updates. Sign up for the Money newsletter Thank you! They will also have to pay for commercial software to file their returns. Previously, these workers had been able to fill out their tax return forms online or by post for free. It will cost an average of £320 to switch to Government-approved software, and then £110 a year after that. You might be able to get free trials or free versions of some of these but you’ll have to pay for others. The Making Tax Digital scheme aims to move all self-employed workers to the digital software over the next few years. The scheme is being rolled out in phases, starting with those earning over £50,000 through self-employed income. Most read in Money Those earning £30,000 or more will need to use the new system from April 2027. Workers earning £20,000 or more will need to from April 2028. Small businesses and community groups including local sports clubs and allotment holders are also affected. They will have to file quarterly, rather than annual, updates to HMRC on their income and expenses. Businesses filing accounts at Companies House will now also have to use commercial software. It’s expected that millions will be impacted by the change by 2028. If you miss the deadline, you will be fined under a new points-based system. HMRC has said the changes will make the process more efficient and raise money for public services. A spokesperson said: “Working closely with businesses, agents and software providers, we’re on track to launch Making Tax Digital for Income Tax in April. “This major reform will drive efficiency and raise more money for public services, as well as making it easier for taxpayers to stay on top of their affairs.” Will I be hit with the charge? You’ll need to use commercial software for your tax return if: You’re a sole trader or a landlord registered for self assessment You get income from self-employment or property, or both Your income from this is more than £20,000 You won’t need to move over until either 2027 or 2028 if you earn less than £50,000. There are some exemptions that mean you won’t have to sign up for Making Tax Digital. These are if you: Don’t have a National Insurance number Are submitting a tax return as a trustee, including a charitable trustee or a trustee of non-registered pension schemes Are submitting an income tax return on behalf of a non-resident company Are a Lloyd’s member and do not have self-employment or property income Are submitting any tax return as a personal representative of a taxpayer who has died Or if you’re submitting a tax return on behalf of a taxpayer because you either: Have an enduring power of attorney or lasting power of attorney to act on their behalf because they’re not physically or mentally capable of filling in a tax return Are appointed by a UK court to act on their behalf because they lack mental capacity. What do I need to do? HMRC will review your self assessment tax return and check your qualifying income each tax year. If your income is above the threshold, you’ll receive a letter from HMRC confirming you need to start using Making Tax Digital by the start of the upcoming tax year. For example, if your qualifying income for the 2024 to 2025 tax year is over £50,000 then you’ll receive a letter. If you don’t get a letter, you’ll still need to check if you should start using Making Tax Digital. The Government has a tool to help you work out which software is best for you. You’ll be asked a series of questions to give you a list of options that will suit your specific needs. You can get software that either creates new digital records or that connects to your existing records, such as any spreadsheets you have. Some of the approved companies listed include QuickBooks, Clear Books, Xero and VitalTax. Comment now