14th October 2025

The UK tax system is changing rapidly with the rollout of Making Tax Digital (MTD). This HM Revenue and Customs (HMRC) initiative is transforming how individuals and businesses report and pay tax. The goal is to make the process more accurate, efficient and accessible.

A key question many expatriates ask is: Does Making Tax Digital apply to UK non-residents?

The short answer is yes. MTD applies to anyone with a UK taxable income that meets the reporting thresholds, including non-residents who earn income from UK property or self-employment.

What Is Making Tax Digital?

Making Tax Digital is a government-led modernisation programme that replaces manual recordkeeping and annual tax returns with a more structured digital process. Individuals who fall within the MTD regime must:

• Keep digital records – All business-related income and expenses must be recorded using MTD-compatible software.
• Submit quarterly updates – Income and expense summaries must be sent to HMRC every three months.
• Use approved software – Returns and updates must be submitted directly from HMRC-approved software.
• File a final declaration – At the end of each tax year, a final digital declaration confirms the complete figures and any adjustments.

The aim is to simplify compliance, reduce errors and improve HMRC’s ability to manage data in real time.

MTD for Income Tax Self Assessment

The next stage of the MTD rollout affects individuals who are self-employed or receive income from property. The introduction will be phased based on gross annual income:

• From April 2026:Individuals with more than £50,000 of total gross income from self-employment or property must join MTD.
• From April 2027: The threshold will extend to those earning more than £30,000.
• Future expansion: Partnerships and lower-income individuals are expected to be included later, with the threshold likely to be reduced to £10,000.

Although these dates may shift, the direction is clear: digital tax reporting will soon replace paper filings for most UK taxpayers.

How Making Tax Digital Affects UK Non-Residents

If you are a UK non-resident with taxable UK income, you will still be affected by MTD. This includes individuals who receive income from UK rental property or self-employment.

You will need to comply if your UK income exceeds the MTD thresholds. However, there are specific considerations and deferrals designed for non-residents:

• Deferral for those filing residence pages: If you submit residence supplementary pages with your tax return, you will not need to join MTD until at least April 2027, regardless of income. This gives additional time to prepare.
• No National Insurance number: Individuals without a UK National Insurance number are currently exempt from MTD.
• Digital exclusion: Exemptions can also be claimed on the grounds of age, disability, limited internet access or religious beliefs that prevent electronic communication. Applications must be approved by HMRC.

In summary, MTD does apply to UK non-residents, but many will benefit from temporary deferrals or specific exemptions depending on their circumstances.

Steps Non-Residents Should Take Now

Preparation is key. Non-residents who may be affected should:

1. Assess income levels – Review gross income from UK self-employment and property to determine when MTD will apply.
2. Choose compatible software – HMRC provides a list of approved providers for digital recordkeeping and submission.
3. Start keeping digital records early – Begin recording UK income and expenses digitally to avoid a rushed transition.
4. Plan for quarterly updates – Move from annual Self Assessment filings to quarterly reporting, followed by a final declaration each year.

By acting early, non-residents can avoid disruption once the regime becomes mandatory.

Why MTD Matters for Expatriates

Making Tax Digital represents a major cultural shift in UK tax administration. It replaces traditional, manual systems with real-time data sharing between taxpayers and HMRC. For non-residents, it adds a new layer of responsibility.

Those with complex cross-border income, rental portfolios or dual-residency positions should ensure their digital records align with both UK and overseas reporting requirements. Early preparation helps prevent mismatches and compliance issues later.

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If you’d like to discuss UK tax, wealth management, or succession planning, our advisers are here to help

Please note this is a general guide and is not advice that can be relied on. It is important that you seek specific advice for your own circumstances. 

This material is intended for both Professional and Retail Clients, as defined by the Dubai Financial Services Authority. Metis Financial Planning Limited is regulated by the Dubai Financial Services Authority.