Major Self-Assessment Changes Coming in 2026
The UK tax system is set for its most significant transformation in decades. From April 2026, major changes to self-assessment will fundamentally alter how business owners and self-employed individuals report their income to HMRC.
Key Date Alert
These changes take effect from April 2026 for the 2026-27 tax year. Now is the time to start preparing.
What's Changing?
1. Quarterly Digital Reporting
The biggest change is the move from annual self-assessment to quarterly digital reporting. Business owners and self-employed individuals will need to submit income and expense information four times a year, not just once.
Current System
- • Annual tax return by 31st January
- • One submission per year
- • Paper or digital options
From 2026
- • Quarterly digital updates
- • Four submissions per year
- • Digital only
2. Real-Time Income Reporting
Similar to how PAYE operates for employees, self-employed individuals will need to report income and expenses as they occur, rather than waiting until the end of the tax year.
3. Digital Record Keeping Mandatory
All records must be kept digitally using HMRC-approved software. Paper-based systems will no longer be acceptable for businesses within the scope of these changes.
Who Will Be Affected?
What Business Owners Should Do Now
1. Assess Your Current Income Levels
Review your business income to determine if you'll be caught by the £30,000 threshold. Remember, this includes total business income, not profit.
2. Upgrade Your Record Keeping
Start moving to digital record-keeping systems now. We can help you choose and implement appropriate software that will be compatible with the new requirements.
3. Consider Business Structure
Some business owners may benefit from incorporating as a limited company to avoid these requirements. However, this decision should be based on overall tax efficiency, not just the new reporting rules.
4. Plan Your Cash Flow
With quarterly reporting comes potential quarterly tax payments. You'll need to manage cash flow more carefully and possibly make provisions for tax throughout the year.
Duncan's Expert Tip
"Don't wait until 2026 to prepare. Start implementing digital record-keeping systems now and establish quarterly review processes. This will make the transition much smoother and may even improve your business management along the way."
Potential Benefits
While these changes may seem daunting, they could bring some advantages:
How We Can Help
At Duncan Joyce & Associates, we're already preparing our clients for these changes: