Making Tax Digital for Authors: Creative Averaging May Delay It Until 2027

Making Tax Digital (MTD) for Income Tax is due to start in April 2026 for self-employed people and landlords with income over £50,000.

This means keeping digital records and sending quarterly updates to HMRC instead of just filing one tax return each year.

However, there is now a small but helpful exception for some creative professionals.

The problem with creative averaging

Some authors can claim creative averaging.

This allows profits from two tax years to be averaged. The idea is to recognise that writing income can be unpredictable. You might spend years writing a book and then receive a large advance or royalty payment in one year.

Creative averaging spreads that income across two years for tax purposes.

The difficulty is that averaging changes the profit of a tax year after the year has finished, which doesn’t fit neatly with the quarterly reporting system used in Making Tax Digital.

HMRC’s solution

HMRC have confirmed that people who claim creative averaging may be able to delay joining Making Tax Digital until April 2027.

This means that instead of starting MTD in April 2026, you would continue submitting a normal Self Assessment tax return for another year.

In practice:

• If you claimed averaging in your 2024/25 tax return, the exemption is automatic.

• If you expect to claim averaging in 2026/27, you can apply to HMRC for an exemption.

Who this applies to

This is mainly relevant for authors and other creative artists whose income fluctuates significantly, particularly where income comes from advances or royalties.

It usually does not apply to writers who are paid regular fees for their work, such as:

• journalists

• copywriters

• scriptwriters working under contract

• freelancers paid per article

These types of income normally don’t qualify for creative averaging.

What this means in practice

If the exemption applies, nothing really changes for now.

You would simply continue filing your tax return as normal for 2026/27, rather than submitting quarterly MTD updates.

HMRC guidance

You can read the HMRC guidance here.

What Next?

If you think that you might use creative averaging in 2026/27 then consider applying for an exemption. If you’re a Writers Tax client we’ll handle this for you.