Understanding MTD for Income Tax: Key Dates, Thresholds and Filing Rules

From April 2026, sole trader and landlords with qualifying income above the threshold must keep digital records, submit quarterly updates to HMRC, and complete a Final Declaration at the end of every tax year.

Who needs to comply with MTD for Income Tax

• Self-employed individuals

• Landlords

• Individuals with combined self-employment and rental income above the thresholds

What is Qualifying Income

• Your gross (combined) turnover from self-employment and/or rental income

What are the Thresholds

• From April 2026 you must comply if your gross income (from your 2024/25 Self-Assessment tax return) exceeds £50,000 annually

• From April 2027, the threshold reduces to £30,000 gross income (from your 2025/26 Self-Assessment tax return)

• From April 2028, the threshold reduces to £20,000 gross income (from your 2026/27 Self-Assessment tax return)

What are the Deadlines and Reporting periods

Quarterly updates must be submitted to HMRC using HMRC-recognised software. Depending on whether your accounting period ends on 31 March or 5 April, different reporting period end dates may be used for submissions to HMRC. However, the filing deadlines remain the same regardless of which accounting period end is chosen:

Quarter	Calendar reporting period	Standard reporting period	Deadline
Q1	01/04 – 30/06	06/04 – 05/07	August 7th
Q2	01/04 – 30/09	06/04 – 05/10	November 7th
Q3	01/04 – 31/12	06/04 – 05/01	February 7th
Q4	01/04 – 31/03	06/04 – 05/04	May 7th

In addition to the four quarterly updates, an End of Year Update must be submitted. This includes any accounting adjustments and tax allowances that need to be reported before the Final Declaration is filed.

The Final Declaration replaces the traditional Self Assessment tax return for individuals within the scope of Making Tax Digital (MTD) for Income Tax.

Ceasing to be eligible for MTD

• Once you have crossed the MTD threshold, you must stay in MTD for a minimum of 3 years

• If you become eligible for MTD and then your qualifying income ceases during the year, you still need to submit quarterly updates up until the date the qualifying income ceases and you still need to submit the final declaration

Penalty points

A quarterly update or Final Declaration is filed late	One penalty point
Point threshold reached (4 points)	£200 penalty
Every further late submission after threshold	Additional £200 penalty each time

If you have penalty points below the threshold and make no further late submissions, each point will automatically expire 24 months after the relevant filing deadline.

If you have reached the penalty threshold, your points will be reset only once you have completed 12 months of compliant filing and submitted all outstanding returns.