The 31 January 2026 self-assessment deadline is in the rear-view mirror for most filers, but the practical work that determines how 2026/27 looks for sole traders, landlords, freelancers, and side-business owners happens in the months between May and August — not in the last-minute rush in January 2027. The 2026 changes to Making Tax Digital for Income Tax Self Assessment are the single biggest reason this matters in a way it didn't last year.
Here is the actual state of UK personal tax administration in late May 2026, and the five housekeeping moves worth doing before the summer.
1. Making Tax Digital ITSA: who is in, who is out, in 2026/27
From 6 April 2026, MTD for ITSA applies to sole traders and landlords with combined gross income over £50,000. From 6 April 2027, the threshold drops to £30,000. From 6 April 2028, to £20,000.
If you're in the £50k+ band, four quarterly updates per tax year are now compulsory, plus an end-of-period statement and a final declaration. These quarterly updates go through MTD-compatible software — FreeAgent (free with NatWest/RBS business banking), QuickBooks Self-Employed (£8-12/month), Xero (£17/month), or HMRC's own basic submission service for the simplest cases.
The first quarterly update for the 2026/27 tax year is due 7 August 2026 for income earned 6 April to 5 July 2026. Missing it triggers a points-based penalty system, similar to MTD for VAT. The fix: book the software setup this Sunday. Two hours of admin saves the panic in August.
2. The £1,000 trading allowance and how it interacts with side income
If your side income (eBay, Vinted, freelance writing, mowing lawns for neighbours, anything self-employed) is under £1,000 gross in the tax year, no self-assessment is required for that activity. Between £1,000 and £85,000, you self-assess. Above £85,000, VAT registration may apply separately.
What HMRC sharpened in 2026: the £1,000 includes the gross sales figure on eBay, Vinted, Etsy and Depop, which the platforms now report directly to HMRC under the 2024 reporting rules. The widely-believed myth that "small online sales aren't reported" is no longer true — they are reported, and the £1,000 threshold applies. Above it, register for self-assessment by 5 October 2026 for the 2025/26 tax year if you haven't already.
3. Landlord deductions, the changed Section 24 rules, and what's actually claimable in 2026
Section 24 has been fully in force for 7 years now — mortgage interest is not deductible as an expense for individual landlords; it's a 20 per cent tax credit instead. The implication: for higher-rate-tax-paying landlords, the effective tax on rental profits has been brutal since 2020.
What's still fully deductible in 2026: agent fees, repairs that maintain rather than improve the property, replacement-of-domestic-items relief (cookers, white goods, carpets — not the first installation, only replacements), insurance, ground rents, service charges, valid HMO licensing fees, depreciation on furnishings via the wear-and-tear or actual cost method.
The opportunity most landlords miss: replacement-of-domestic-items relief. A £400 new washing machine replacing an old one in a furnished let is fully deductible. The receipts get lost in 60 per cent of cases and the deduction goes unclaimed. Set up a separate "landlord receipts" folder this Sunday, or a folder in your accounting software, and post-its for every replacement become tax-deductible by default.
4. Capital gains tax on a second home or buy-to-let sold in 2025/26
The annual CGT exemption is £3,000 in 2025/26 (down from £12,300 in 2022/23). For higher-rate taxpayers, CGT on residential property is 24 per cent above the exemption.
If you sold a buy-to-let or a second home between 6 April 2025 and 5 April 2026, the 60-day reporting deadline already applies — the gain must be reported and paid within 60 days of completion via the HMRC Property Disposal Service. If you missed this (it happens), declare it now and pay the small late-filing penalty — the principal-plus-interest is much smaller than the cumulative penalty if HMRC catches it next year.
5. The basic Personal Allowance gotcha for high earners
The £100,000 income marginal-rate trap is one of the most expensive misconceptions in UK personal tax. Above £100,000 gross income, the Personal Allowance reduces by £1 for every £2 earned. Between £100,000 and £125,140, the effective marginal tax rate is 60 per cent.
The mitigation: pension contributions and Gift Aid reduce adjusted net income for this calculation. If you earned £108,000 and made a £8,000 pension contribution, your adjusted net income is £100,000 and you keep the full Personal Allowance. The effective tax saving on that pension contribution is approximately 60 per cent, plus the long-term retirement benefit.
Action: if you're in the £100k-£125k band, sit down with last year's payslip and calculate adjusted net income. If it's just above £100k, a top-up pension contribution before tax year-end (5 April 2027 for the current year) is the highest-effective-rate tax saving available in UK personal tax.
The Sunday list
Pick MTD software if you're sole-trader or landlord above £50k. Confirm side-income status and SA registration if needed. Set up a landlord receipts folder. Confirm any 2025/26 property sale was reported within 60 days. Run the adjusted-net-income calculation if you're in the £100k-£125k band.
None of this is glamorous. All of it is straight cash, either saved or kept clear of HMRC's late-filing penalty regime. The work-for-pound rate on these five items is far higher than any tax-planning advice your bank will sell you this year.