Making Tax Digital for Income Tax (MTD for IT) represents a significant change in how individuals report income to HMRC. While much of the focus has been on UK residents, non-UK resident individuals with UK income may also be affected.
1. Overview of MTD for Income Tax
MTD for IT will change how many individuals with business or property income report to HMRC. Rather than reporting annually through Self-Assessment, those within scope will also need to report certain types of income—such as business or property income—on a quarterly basis under the MTD for IT framework.
From 6 April 2026, individuals will be required to comply with MTD for IT if they have qualifying income exceeding £50,000. This threshold is expected to reduce to £30,000 from April 2027.
Qualifying income includes:
- UK or overseas self-employment income
- UK or overseas property income
What will individuals need to do under MTD?
Those within scope will need to:
- Maintain digital records of their income and expenses
- Submit quarterly updates to HMRC
- Submit a year-end finalisation statement (similar to the annual Self-Assessment tax return)
2. Start date and deferral for non-residents
MTD for IT is widely reported as starting from 6 April 2026. However, non-UK resident individuals (and other individuals who included the SA109 residence pages in their 2024/25 UK tax return) are automatically granted a 12-month deferral, meaning they are not required to comply with MTD for IT until April 2027.
Individuals who reasonably expect that they will also need to include the SA109 residence pages in their 2025/26 or 2026/27 tax returns can apply for this temporary deferral.
3. What are non-UK resident individuals required to report?
For non-UK resident individuals, the scope of MTD for IT is more limited.
Non-residents are only required to report:
- UK source self-employment income, and
- UK property income
Importantly:
- Non-UK source income is outside the scope of MTD for IT
This is consistent with existing UK tax rules, where non-residents are generally only subject to UK tax on their UK-source income (subject to any specific anti-avoidance or temporary non-residence rules).
As a result, a non-resident individual who meets the conditions with:
- UK rental property → within MTD
- Overseas rental property → outside MTD
- Overseas business income → outside MTD
4. Entering and leaving the UK – transitional years
Where individuals arrive in or leave the UK, special attention is needed to ensure you comply with MTD for IT for the correct periods.
Leaving the UK
An individual leaving the UK who continues to have qualifying UK income will be required to continue complying with MTD for IT.
However, for overseas income, you will only fall within MTD for IT for periods in which you are UK resident. Before you stop filing quarterly updates, it is sensible to agree this position with HMRC to reduce the risk of penalties being issued.
Arriving in the UK
An individual arriving in the UK, who has already been complying with MTD for IT due to UK qualifying income, will continue to report their qualifying income as they have been.
However, if an individual has a new qualifying source of income e.g. overseas self-employment or property income, then they will need to start complying with MTD for IT. The date from which you will need to comply will depend on when you become UK resident and your qualifying income meets the necessary thresholds.
5. Summary
- MTD for IT starts from 6 April 2026 for individuals with qualifying income over £50,000 (expected to reduce to £30,000 from April 2027).
- Many non-UK resident individuals will have a 12-month deferral, meaning their start date will be April 2027.
- Non-residents will generally only need to report UK self-employment and UK property income under MTD for IT (not overseas income).
- Arrival/departure years can change what you must report and when and can potentially result in penalties if filings are stopped too soon or started too late.
If your UK residence status changes during a tax year, pay close attention to when you are required to begin or cease reporting under MTD for IT, as obligations depend on your residence and income sources.
Seek advice to confirm your reporting responsibilities and avoid HMRC penalties.
6. How PEM can help
We can support individuals, including non-UK residents, with practical, tailored guidance on MTD for IT.
- Clarity on your position – we confirm whether MTD applies to you
- Smooth transition – we help set up compliant digital record systems
- Ongoing support – we manage quarterly submissions and year-end reporting
- Reduced risk – we help you stay on top of reporting requirements and deadlines
Our approach is clear and proactive, so you can focus on your affairs without unnecessary admin. If you are unsure how MTD for IT applies to your personal situation, we can help you plan ahead and stay compliant.
Get in touch with our team to discuss your position and next steps.
