Taxpayers are required to use MTD income tax from April 2026 where their combined gross income from any sole trades or property businesses (MTD sources) carried on in 2024/25 exceeded £50,000. Other taxpayers may join at a later date, and it is possible to volunteer to use MTD income tax. For further information, see ICAEW’s MTD hub.  

All MTD sources ceased 

HMRC has clarified the steps that taxpayers and agents should take where: 

• the taxpayer is within MTD income tax for 2026/27 (based on their 2024/25 self assessment return); and
• all of the taxpayer’s MTD sources ceased before 2026/27.  

Where this is the case, the taxpayer or their agent should call or use webchat to inform HMRC of the cessation, making it clear that there is a cessation of all MTD sources.  

HMRC will then confirm that the taxpayer is not required to use MTD income tax for 2026/27 onwards and will update the taxpayer’s record to reflect this. Written confirmation will also be sent to the person – taxpayer or agent – who contacted HMRC, although there may be a delay in receiving this.  

It is also possible to notify HMRC of the cessation by letter, but HMRC advises that telephone or webchat contact is preferred.  

The cessation must still be recorded on the 2025/26 self assessment return. 

HMRC has updated its guidance on qualifying income (under ‘ceased income sources’) to reflect this.  

Previously, HMRC had said that the taxpayer could contact HMRC as set out above or follow a digital process by signing up for MTD income tax and then notifying HMRC of the cessation through their HMRC online account (or the agent’s agent services account). HMRC is now advising against following the digital process where all MTD sources ceased before 6 April 2026.   

Partial cessation of MTD sources 

Where a MTD source ceased before 2026/27, but at least one other MTD source continues in 2026/27, the taxpayer must continue to sign up and use MTD income tax for their remaining MTD source or sources – even if the remaining sources are below the threshold. The taxpayer or their agent can notify HMRC of the cessation by following the digital process set out above. The cessation must still be recorded on the 2025/26 self assessment return.