MTD Readiness Checklist
Work through each section to make sure you are fully prepared for Making Tax Digital for Income Tax. Your progress is saved automatically.
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Calculate your qualifying income
Add together your gross self-employment turnover and UK property income (before expenses). This is not your taxable profit.
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Determine which phase applies to you
Phase 1: income over £50,000 (Apr 2026). Phase 2: over £30,000 (Apr 2027). Phase 3: £20,000 or more (Apr 2028). Read the full guide
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Check whether you qualify for an exemption
Exemptions apply for foster carers, those without a National Insurance number, the digitally excluded, and those with Power of Attorney or Court of Protection appointees.
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Sign up via your Government Gateway account
You will need your Government Gateway user ID and password. If you do not have one, register on GOV.UK.
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Authorise your accountant or agent (if applicable)
Your agent needs authorisation to submit quarterly updates on your behalf. This is done through your HMRC online account.
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Register at least 2 weeks before your first deadline
Allow time for HMRC to process your sign-up. For Phase 1, your first quarterly deadline is 7 August 2026.
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Review HMRC-recognised MTD ITSA software
HMRC publishes a list of compatible software. Compare your options on our software guide
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Decide between cloud, desktop, or bridging software
Cloud software syncs automatically, desktop runs locally, and bridging tools link spreadsheets to HMRC. Choose what suits your workflow.
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Check multi-income source support
If you have both self-employment and property income, ensure your software handles multiple income sources in a single submission.
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Set up bank feeds and receipt scanning
Automating bank transactions and digitising receipts saves time and reduces errors when submitting quarterly updates.
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Transfer existing records to your software
Import opening balances and prior-year data into your new system. Most cloud software supports CSV imports.
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Categorise income and expenses
Set up categories that match HMRC’s self-employment and property income schedules so quarterly updates are straightforward.
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Set up separate tracking per income source
MTD requires you to report each income source individually. If you have multiple businesses or properties, track them separately.
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Ensure digital records are in place from the start of your MTD tax year
Your digital records must begin from 6 April of the tax year you are mandated. Do not wait until your first deadline.
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Learn the four quarterly submission deadlines
Q1 (6 Apr–5 Jul) due 7 Aug • Q2 (6 Jul–5 Oct) due 7 Nov • Q3 (6 Oct–5 Jan) due 7 Feb • Q4 (6 Jan–5 Apr) due 7 May
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Set calendar reminders for each deadline
Add reminders at least one week before each quarterly deadline and the Final Declaration date to avoid last-minute rushes.
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Note the Final Declaration deadline: 31 January following the tax year end
The Final Declaration replaces the current Self Assessment return. For 2026/27, this is due by 31 January 2028.
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Understand the 2026/27 soft-landing period
HMRC will not charge penalty points for late quarterly updates during the first year (2026/27). This gives you time to adjust.
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Understand the points-based penalty system
Each late quarterly update adds 1 penalty point. At 4 points, you receive a £200 penalty. Read the full penalties guide
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Know that points expire after 24 months of on-time compliance
If you submit all quarterly updates on time for 24 consecutive months, your penalty points will be reset to zero.
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Be aware that late payment penalties are separate
Late submission penalties (points) and late payment penalties are two distinct regimes. Paying late incurs separate interest and charges.
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Consider whether you need an accountant for MTD
Quarterly reporting adds administrative complexity. A qualified accountant can manage submissions, flag issues early, and save you time.
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Ask your existing accountant about their MTD readiness
Check that your accountant is set up to file MTD submissions. Not all firms have adopted MTD-compatible workflows yet.
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Ensure your accountant uses MTD-compatible software
Your accountant’s software must connect to HMRC’s MTD API. Ask them which software they use and confirm it is on the HMRC-recognised list.
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