Last updated: 17 February 2026
Frequently Asked Questions about Making Tax Digital
When does Making Tax Digital for Income Tax start?
MTD for Income Tax becomes mandatory in phases:
- 6 April 2026: Sole traders and landlords with qualifying income above £50,000
- 6 April 2027: Qualifying income above £30,000
- 6 April 2028: Qualifying income of £20,000 or more
Qualifying income means gross income from self-employment plus gross UK property income (not profit).
MTD for VAT has been mandatory for all VAT-registered businesses since April 2022.
What are the quarterly deadlines for MTD?
You must submit quarterly updates by the 7th of the second month after each quarter ends:
- Quarter 1 (6 April – 5 July): submit by 7 August
- Quarter 2 (6 July – 5 October): submit by 7 November
- Quarter 3 (6 October – 5 January): submit by 7 February
- Quarter 4 (6 January – 5 April): submit by 7 May
A Final Declaration replaces the End of Period Statement and is due by 31 January following the end of the tax year.
What is the VAT threshold?
The VAT registration threshold is £90,000 (from 1 April 2024). All VAT-registered businesses — regardless of turnover — must already comply with MTD for VAT. This means keeping digital records and submitting VAT returns through compatible software.
What software do I need for MTD?
You need HMRC-recognised MTD-compatible software to keep digital records and submit your quarterly updates. Popular options include Xero, QuickBooks, FreeAgent, and Sage. HMRC maintains a list of compatible software on GOV.UK. See our software guide for help choosing.
What are the penalties for late MTD submissions?
HMRC uses a points-based penalty system. Each late quarterly update earns 1 penalty point. At 4 points, a £200 fixed penalty is charged. Points expire after 24 months of compliance.
Soft-landing for 2026/27: HMRC will not issue penalty points for the first 4 quarterly updates in the first year of mandation, giving taxpayers time to adjust.
Late payment penalties are separate and interest is charged from the due date. See our penalties guide for full details.
Do I need MTD if I only have rental income?
Yes, if your gross UK property income (plus any self-employment income) exceeds the relevant threshold. Qualifying income is calculated before deducting expenses. For example, if your gross rental income is £55,000 from 6 April 2026, you must comply with MTD even if your profit after expenses is much lower.
Can I be exempt from MTD?
Exemptions apply to:
- Foster carers (income from foster care is calculated differently)
- People without a National Insurance number
- Those who are digitally excluded (for example, due to age, disability, or location)
- People subject to a Power of Attorney or Court of Protection appointees
If you believe you qualify for an exemption, you must apply to HMRC. Simply preferring not to use digital tools is not a valid reason for exemption.
What about MTD for Corporation Tax?
No mandatory start date has been set for MTD for Corporation Tax. The government has not announced a timetable. Companies continue to file Corporation Tax returns through HMRC’s existing online services. See our Corporation Tax page for the latest status.
What about partnerships?
General partnerships were originally expected to be included in MTD ITSA. Mandation has been deferred and no start date has been confirmed by HMRC.
Where can I get help with MTD?
Jack Ross Chartered Accountants has been helping clients prepare for MTD since the HMRC pilot programme. We can help you choose software, set up digital records, and manage your quarterly submissions. Contact us for a free initial consultation.
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Need help with MTD?
Sources:
GOV.UK – MTD for Income Tax
GOV.UK – Overview of Making Tax Digital
