The Final Declaration: What Replaces Self Assessment

MTD Final Declaration Explained: What Replaces Your Self Assessment Tax Return

Last updated: February 2026

Under Making Tax Digital for Income Tax, the annual Self Assessment tax return is replaced by a new year-end submission called the Final Declaration. If you are a sole trader or landlord with qualifying income above the MTD threshold, this is the document that closes your tax year. It pulls together everything HMRC needs to calculate your final tax bill, and it must be filed through MTD-compatible software rather than through HMRC’s existing online Self Assessment portal.

What the Final Declaration is

The Final Declaration is the year-end submission that replaces the traditional Self Assessment tax return for anyone within MTD for Income Tax. Throughout the tax year, you submit four quarterly updates containing your business income and expenses. The Final Declaration comes after those quarterly updates and wraps everything together into a single annual filing.

Think of it this way: the quarterly updates provide HMRC with your business figures in near-real time. The Final Declaration is where you confirm those figures are correct, add any non-business income, and claim all the reliefs and allowances you are entitled to. It is the step where your full tax position for the year is finalised.

The Final Declaration must be submitted digitally through your MTD software. You cannot file it through HMRC’s existing Self Assessment online service, even if you have used that system for years. This is a fundamental change in how year-end tax filings work.

The deadline

The Final Declaration is due by 31 January following the end of the tax year. For the 2026/27 tax year (6 April 2026 to 5 April 2027), the Final Declaration deadline is 31 January 2028. This is the same date as the current Self Assessment filing deadline, so the timeline itself is familiar even though the process has changed.

This gives you roughly 10 months after the tax year ends to prepare and submit your Final Declaration. If you have been keeping on top of your quarterly updates, much of the groundwork is already done by the time you reach this stage.

End of Period Statement: removed

Earlier versions of the MTD for Income Tax legislation included a step called the End of Period Statement (EOPS), which sat between the quarterly updates and the Final Declaration. HMRC removed this requirement as part of their simplification of the MTD process. There is no longer a separate End of Period Statement. The Final Declaration now serves as the single year-end filing, reducing the total number of annual submissions from six (four quarterly updates, one EOPS, one Final Declaration) to five (four quarterly updates plus the Final Declaration).

If you have read older guidance that mentions the End of Period Statement, you can disregard it. It is no longer part of the MTD framework.

What goes into the Final Declaration

The Final Declaration covers far more than your business income and expenses. Those figures come from your quarterly updates. The Final Declaration is where you report everything else and make the adjustments that determine your actual tax liability.

Confirming quarterly update figures

Your four quarterly updates will already have provided HMRC with your business income and expenses for the year. The Final Declaration asks you to review and confirm those figures. If any of your quarterly submissions contained errors, this is your opportunity to amend them. You are not locked into the numbers you submitted during the year.

Non-business income

This is one of the biggest differences between the quarterly updates and the Final Declaration. Your quarterly updates only cover self-employment and property income. The Final Declaration is where you report all other taxable income:

• PAYE employment income (if you have a job alongside your business or rental activity)
• Dividends from shares or company investments
• Savings interest from banks and building societies
• Pension income (state pension and private pensions)

HMRC will pre-populate some of this information from employer payroll data and financial institutions. You need to check it is correct and add anything that is missing.

Capital gains

Any capital gains made during the tax year are reported in the Final Declaration. This includes gains from selling shares, investment property, or other assets. If you have already reported residential property gains through the 60-day capital gains reporting service, those figures carry across, but you still need to include them in your Final Declaration to calculate your overall tax position.

Reliefs and allowances

The Final Declaration is where you claim the reliefs that reduce your tax bill:

• Pension contributions: personal contributions to registered pension schemes qualify for tax relief
• Loss relief: if your business or property made a loss, you can set it against other income or carry it forward
• Gift Aid: charitable donations made under Gift Aid extend your basic rate band
• Capital allowances: the Annual Investment Allowance, writing down allowances, and other capital allowances for business equipment and vehicles

Your personal allowance (£12,570 for 2026/27) and tax band thresholds are applied automatically by HMRC’s systems once your Final Declaration has been processed. The software and HMRC between them calculate your tax liability based on all the information submitted.

How the Final Declaration works with quarterly updates

The relationship between the quarterly updates and the Final Declaration is straightforward. The quarterly updates handle the routine reporting of business income and expenses throughout the year. The Final Declaration handles everything else.

Here is the full annual cycle under MTD for Income Tax:

The quarterly updates build a running picture of your business finances. The Final Declaration completes that picture by adding personal income, investment income, and all the year-end adjustments that affect how much tax you owe.

Current Self Assessment vs MTD Final Declaration

If you currently file a Self Assessment return, the Final Declaration will feel familiar in many respects. The main differences are in how you file and what has already been reported during the year.

The substance of what you report is largely the same. The difference is that under MTD, the business portion arrives at HMRC in quarterly instalments rather than in one annual batch, and the filing must go through approved software rather than HMRC’s own website.

What happens if you miss the deadline

Late submission of the Final Declaration carries penalties. Unlike the quarterly updates, which use the new points-based penalty system, the Final Declaration follows the existing late filing penalty regime for Self Assessment:

• 1 day late: £100 fixed penalty
• 3 months late: £10 per day for up to 90 days (maximum £900)
• 6 months late: 5% of the tax due or £300, whichever is greater
• 12 months late: a further 5% of the tax due or £300, whichever is greater

There is no soft-landing period for the Final Declaration. The soft landing that applies during 2026/27 covers only the quarterly updates, not the year-end filing. If your Final Declaration is late, penalties apply from day one. Late payment of the tax owed also attracts separate interest and surcharges, just as under the current Self Assessment system.

Worked example: James’s Final Declaration

James is a landlord with a portfolio of buy-to-let properties. He also works part-time as a salaried employee. Here is how his MTD year comes together.

Quarterly updates (submitted throughout the year):

• Total property income reported across four quarters: £48,000
• Total allowable expenses reported across four quarters: £22,000 (mortgage interest relief at basic rate, repairs, agent fees, insurance)
• Net property profit from quarterly updates: £26,000

Final Declaration (submitted by 31 January):

James opens his MTD software and begins his Final Declaration. He confirms the quarterly figures are correct, then adds the following:

• PAYE salary from his part-time job: £15,000 (tax already deducted at source)
• Dividend income from share investments: £3,000
• Pension contribution (personal): £5,000 (extends basic rate band by £5,000)
• Capital allowances on replacement boiler and white goods: £2,800

Tax calculation:

His software calculates the position as follows. Property profit of £26,000 less £2,800 capital allowances gives adjusted property income of £23,200. Add PAYE income of £15,000 and dividends of £3,000 for total income of £41,200. Deduct the personal allowance of £12,570, leaving taxable income of £28,630. The £5,000 pension contribution extends the basic rate band to £42,270, so all of James’s taxable income falls within the basic rate. His dividends fall within the £500 dividend allowance (2026/27 rate), so no additional dividend tax is due.

James reviews the calculation, confirms it, and submits. HMRC receives his Final Declaration and issues a tax calculation showing what he still owes after accounting for PAYE tax already deducted by his employer.

Preparing for the Final Declaration

The best preparation for a smooth Final Declaration is accurate quarterly updates. If your quarterly figures are correct and up to date, the year-end process becomes a matter of adding non-business income and claiming reliefs rather than unpicking 12 months of messy records. Keep receipts for capital purchases, note any pension contributions, and gather your P60 from any employer before you sit down to file.

If you work with an accountant, the Final Declaration is typically where their expertise adds the most value. Identifying which capital allowances to claim, structuring loss relief correctly, and ensuring pension contributions are optimised are all tasks that benefit from professional advice.

Sources

• GOV.UK: Use Making Tax Digital for Income Tax
• GOV.UK: Final Declaration for Making Tax Digital for Income Tax
• GOV.UK: Self Assessment tax returns – Penalties