MTD for Income Tax: Live — and HMRC Clarifies the Exit Route
Making Tax Digital for Income Tax has been mandatory since 6 April for sole traders and landlords with gross qualifying income above £50,000. If you're in scope, you must now keep digital records and file quarterly updates using compatible software — with the first quarterly update covering 6 April to 5 July 2026 due by 7 August 2026.
A useful clarification arrived this week via ICAEW: if all your MTD-qualifying income (self-employment or property) ceased before 6 April 2026, you are not required to use MTD. You should call HMRC or use webchat to confirm the cessation rather than following the digital sign-up process — HMRC will update your record accordingly. If at least one MTD source continues into 2026/27, you must use MTD for that remaining income even if it is below the threshold on its own.
Source: ICAEW — HMRC clarifies position on MTD and cessations
IHT Agricultural and Business Relief Cap Now In Force
From 6 April 2026, the previous 100% Inheritance Tax relief for agricultural property and business property is no longer unlimited. The combined Agricultural Property Relief and Business Property Relief now applies in full only up to £2.5 million per individual (effectively £5 million for couples, as unused allowance transfers to a surviving spouse). Assets above that threshold receive 50% relief, producing an effective IHT rate of 20% on the excess.
The government estimates around 185 estates will be affected in 2026/27 — approximately 15% of all APR/BPR claims. For those estates, the option to pay IHT in up to 10 annual interest-free instalments has been extended to all qualifying assets, which eases cash-flow pressure for farm families.
ISA Alert: The Last Full Year for Under-65s to Use the Full Cash ISA Allowance
The £20,000 ISA allowance has reset for 2026/27 as normal. But savers under 65 should be aware that from 6 April 2027, the rules change significantly: adults under 65 will only be able to subscribe up to £12,000 into a Cash ISA, with the remaining £8,000 required to go into Stocks and Shares or another non-cash type. Savers aged 65 and over retain the full £20,000 cash ISA limit. This makes 2026/27 the last tax year for most people to use the full £20,000 in a Cash ISA — worth bearing in mind if you prefer cash savings to investing.
Source: Yorkshire Building Society — ISA Allowance 2026/27 | Related: ISA Allowance Guide
Statutory Sick Pay: Now Payable to All Employees from Day One
A quieter change that took effect on 6 April — following reforms in the Employment Rights Act 2025, Statutory Sick Pay is now available to all employees regardless of their earnings. Previously, workers had to earn above the Lower Earnings Limit (£125 per week in 2025/26) to qualify. The LEL restriction has been removed, meaning part-time and lower-paid workers can now claim SSP from their first day of sickness absence. The standard SSP rate for 2026/27 is £116.75 per week.
Key Dates
19 April 2026 (Sunday) — Final Employer Payment Summary deadline for the 2025/26 tax year. Employers must submit any corrections to PAYE and confirm no further payments are due for the year by this date.
30 April 2026 — Bank of England MPC decision. Bank Rate is currently 3.75%; market consensus is heavily weighted toward a hold, though the Middle East-driven energy price rise has complicated the BoE's inflation outlook.
31 May 2026 — P60 deadline. Employers must issue P60s to all employees for the 2025/26 tax year.
7 August 2026 — First MTD quarterly update due for those in scope from April 2026, covering 6 April – 5 July 2026.