Making Tax Digital for Income Tax Fact Checker
There's a lot of information and misinformation about Making Tax Digital for Income Tax.
This is unsurprising as this flagship project from HMRC is still in the testing phase at the time of writing or updating this article (March 2025).
Let's look at what we know so far:
Turnover limits and dates
Making Tax Digital for Income Tax will apply to self employed business owners and landlords with a qualifying income over:
- £50,000 from April 2026
- £30,000 from April 2027
- £20,000 from April 2028
The go live date is the start of the 2026 / 2027 tax year beginning 6th April 2026.
What are the reporting periods and deadlines for filing?
Under the new system, cumulative updates will need to be submitted to the tax quarter end dates which are different to the calendar quarters being:
| Quarter Number | Period covered by update | Filing deadline |
|---|---|---|
| 1 | 6 April to 5 July | 7 August |
| 2 | 6 April to 5 October | 7 November |
| 3 | 6 April to 5 January | 7 February |
| 4 | 6 April to 5 April | 7 May |
HMRC will allow updates to be filed to calendar quarter end dates, via making a calendar quarter election, to make things easier. This means that the filing dates would be:
| Quarter Number | Period covered by update | Filing deadline |
|---|---|---|
| 1 | 1 April to 30 June | 7 August |
| 2 | 1 April to 30 September | 7 November |
| 3 | 1 April to 31 December | 7 February |
| 4 | 1 April to 31 March | 7 May |
What has to be filed?
Each quarter your income and costs figures will be submitted with costs broken down by categories.
Top tip >> if your annual turnover (gross income) is less than £90,000 then you can just submit your total income and total costs without the need to break down costs by categories. This will be a huge time saver for many.
Do I still need to file a self assessment tax return?
The self assessment will be replaced by a digital tax return which is similar to the current self assessment tax return although whatever software being used should pre populate the return with income and expenses from the quarterly updates already filed. The digital return will obviously need to be updated for any other sources of income although again some figures may already be pre populated.
How do I file?
All Making Tax Digital for Income Tax filing will need to be done electronically using software.
HMRC are maintaining a list of software suppliers which can be found on their web site.
Caution >> HMRC have confirmed that they will NOT be providing their self assessment online filing service for those within the new MTD regime. So it is vital to determine that the software you select to use is capable of completing the annual as well as the quarterly electronic filing required.
The HMRC self assessment online filing service will still be available for those outside of the new MTD regime.
Is there any free software?
It is unclear if there will be any free software available to meet both the quarterly and annual filing requirements of the new MTD regime. The expectation is that any software providing all of the functionality needed to adhere to the new MTD regime will only be provided at a cost.
When do I need to pay the tax due?
Currently the deadline for paying tax remains unchanged at 31st January following the end of the tax year, as well as for payments on account due on 31st January and 31st July. Of course this may change in the future as the new system becomes more bedded in.
Will I be fined if I miss a deadline?
In the initial stages of the new MTD regime there will be no fines for missed deadlines. Of course the expectation is that this will change and HMRC will introduce some sort of penalty regime for those who missed a filing deadline.
Will I be fined if I get a return wrong?
Again in the initial stages of the new MTD regime there will be no fines for getting a return wrong. Again this may change as the new regime beds in.
Does Making Tax Digital for Income Tax apply to Limited Companies
No - the new Making Tax Digital for Income Tax regime does not apply to limited companies.