Tax & Finance

#2026/336The Income Tax (Digital Obligations) Regulations 2026

🇬🇧United Kingdom··Statutory Instrument·High Impact·View source ↗

AI-generated summary for informational purposes only. Not legal advice. See the original source for the authoritative text.

🇬🇧 English

These UK regulations mandate the use of HMRC-approved functional compatible software for self-assessment tax returns and quarterly updates starting from the 2026-27 tax year for most individuals and businesses with trading income. Taxpayers must keep digital records, submit quarterly updates within set deadlines, and use compatible software to file their final return. The rules include a digital start date, termination date, and specific quarterly periods. Multiple exemptions exist based on income thresholds, specific professions, non-residence, trusts, visiting performers, and other categories to ease the transition.

AI-generated summary. May contain errors. Refer to official sources for legal decisions.

Key Changes

  • Mandatory use of HMRC functional compatible software for tax returns from 6 April 2026
  • Requirement to submit quarterly updates with deadlines based on calendar quarters or standard periods
  • Obligation to maintain digital records for all relevant taxpayers

+ 3 more changes with Pro

Obligations

What this law requires

high

Use HMRC-approved functional compatible software to deliver self-assessment tax returns for the 2026-27 tax year onwards

Individuals and businesses with trading income subject to digital obligations
operational
high

Submit quarterly updates to HMRC within set deadlines using functional compatible software

Individuals and businesses with trading income subject to digital obligations
reporting
high

Keep digital records in accordance with Part 5 of the regulations

Individuals and businesses with trading income subject to digital obligations
operational
medium

Determine and track qualifying income to establish whether exemption thresholds apply for each tax year

Individuals and businesses potentially subject to digital obligations
disclosure
medium

Notify HMRC if making a calendar quarters election to align quarterly update periods with calendar quarters rather than standard periods

Individuals and businesses with trading income subject to digital obligations
reporting

Affected Parties

Self-assessment taxpayersSole traders and partnerships with trading income+3 more…

Tags

self-assessment,digital-reporting,HMRC