On 29 July 2026 HMRC quietly published fresh guidance clarifying how the next phase of Making Tax Digital for Income Tax Self-Assessment (MTD ITSA) will apply to overseas landlords, international remote workers and other mobile employees. The update—flagged in ICAEW’s “Tax news in brief” bulletin—aims to give taxpayers and software providers just eight months to prepare before mandatory quarterly reporting begins in April 2027. Key points: • Expatriates and non-resident landlords with UK rental income above £10,000 will have to use compatible software to submit quarterly updates, even if they file from abroad. HMRC confirmed that using an overseas cloud provider is acceptable provided data are accessible to UK auditors. • Split-year and short-stay employees working partly in the UK will fall under MTD if their UK-source earnings exceed £30,000—lower than the general £50,000 threshold. Employers running shadow-payrolls must supply digital income statements to assignees. • The department published draft API specifications for third-party providers, warning that legacy spreadsheet bridging tools will no longer be supported after 5 April 2027. Why it matters for mobility managers: The guidance ends months of uncertainty over whether globally mobile staff would enjoy a further deferral. Payroll, accounting and assignment-tracking systems now need rapid upgrades to capture real-time exchange-rate data and allocate income to UK tax periods. Companies should audit their mobile-worker population, identify those who breach the new lower thresholds and begin communications about digital record-keeping requirements. Failure to comply will trigger the new points-based late-submission penalty regime. HMRC will apply an initial soft-landing period but warns that “habitual defaulters”, including landlords with repeated late filings, will face accelerated penalties and possible security deposits. With the government relying on MTD efficiencies to fund headline VAT and business-rate cuts promised in the Spring Budget, officials show no appetite for further delays. Specialist tax advisers recommend that companies update global assignment policies, incorporate MTD software costs into tax-equalisation calculations and arrange employee briefings before the busy autumn mobility cycle.
