Making Tax Digital for Income Tax (MTD) is a new HMRC system that will change how self-employed individuals and landlords report their income.
WHAT YOU NEED TO KNOW
From April 2026, HMRC will introduce new rules called Making Tax Digital (MTD) for Income Tax. These rules will change how some individuals report their income to HMRC.
MTD is designed to move the tax system towards digital record keeping and more frequent reporting.
WHO WILL BE AFFECTED BY MTD?
From 6 April 2026, Making Tax Digital will apply to individuals who have more than £50,000 of gross income from:
Self-employment
Property rental income
The threshold will reduce to £30,000 from April 2027. Income such as employment, dividends and bank interest does not count towards this threshold.
WHAT WILL CHANGE?
Currently, most taxpayers submit one Self Assessment tax return each year.
Under MTD, individuals within the rules will need to submit information to HMRC throughout the year using compatible software.
This involves:
Four quarterly updates summarising income and expenses
An End of Period Statement confirming the final business figures
A Final Declaration confirming all income for the tax year
WHAT’S DUE, WHEN?
End of Period Statement: due 31 January
Final Declaration: due 31 January
QUARTER 1
6 April – 5 July
DUE
7 August
QUARTER 2
6 July – 5 October
DUE
7 November
QUARTER 3
6 October – 5 January
DUE
7 February
QUARTER 4
6 January – 5 April
DUE
7 May
Digital Record Keeping
MTD requires taxpayers to keep digital records and submit information using compatible software. This does not necessarily mean moving to full bookkeeping software. In some cases, spreadsheets can still be used alongside bridging software that submits the required information to HMRC.
End of Period Statement
After the tax year ends, the End of Period Statement is submitted. This confirms the final business figures and includes adjustments such as:
Capital allowances
Accounting adjustments
Disallowable expenses
Will payments change?
HMRC have confirmed there are no plans to change the way tax liabilities are paid.
Final Declaration
The Final Declaration replaces the current Self Assessment tax return. It confirms the taxpayer’s full income position for the year, including:
Employment income
Dividends
Interest
Pensions
Business and property income
The deadline for the End of Period Statement and Final Declaration remains 31 January following the end of the tax year.
Making Tax Digital for Income Tax will change how many self-employed individuals and landlords report their income to HMRC.
We can help you prepare for these changes by confirming whether the rules apply to you, setting up the required digital record-keeping and managing the quarterly submissions.
We will also take care of the year-end reporting and final declaration so that you remain fully compliant while keeping the process as simple as possible.
Will I still need to submit a tax return?
Yes. Under Making Tax Digital you will submit four quarterly updates during the year, followed by an End of Period Statement and a Final Declaration, which replaces the traditional Self Assessment tax return.
Do I need to use accounting software?
Making Tax Digital requires records to be kept digitally and submitted using compatible software. This can include accounting software or spreadsheets that link to HMRC through bridging software.
What information needs to be submitted quarterly?
The quarterly updates will include a summary of income and expenses for the period. These updates give HMRC an estimate of your tax position during the year but do not finalise the tax calculation.
