Making Tax Digital for Income Tax: Key Dates and What to Do Now

The Making Tax Digital for Income Tax (MTD for ITSA) initiative is transforming tax compliance for UK sole traders and landlords. Instead of a single annual return, you’ll keep digital records and submit quarterly updates.


What is Making Tax Digital for Income Tax?

Making Tax Digital (MTD) is an HMRC initiative to digitise the UK tax system. It requires eligible businesses and landlords to maintain digital records, send quarterly updates, and file a final annual declaration, all using HMRC-approved software.


Why Is HMRC Moving to Digital Tax?

The aim is to make the tax system more efficient, accurate, and easier to manage, reducing manual errors and encouraging real-time reporting.


Who Must Comply and When?

  • From 6 April 2026, Sole traders and landlords with total gross income over £50,000 must use MTD for income tax.
  • From 6 April 2027: The threshold lowers to £30,000.
  • The Spring Statement 2025 officially announced that MTD for Income Tax will extend to those with qualifying income over £20,000 from April 2028
  • Check your qualifying income using GOV.UK eligibility guidance.


MTD does not apply if your only income is from employment or pensions.


Special Cases and Exemptions

You are exempt if:

  • Your annual qualifying income is below the threshold.
  • You meet HMRC’s exemption criteria for reasons of age, disability, location, or religious beliefs.

See how to apply or check for exemption at GOV.UK exemption info.

Date Event
6 April 2026 MTD mandatory for those with qualifying income above £50,000
6 April 2027 Threshold lowers to £30,000
End of each quarter Quarterly updates due (see schedule below)
31 January, following the tax year Final declaration deadline (replaces Self Assessment for most)

For a detailed timeline, see official MTD dates (MakingTaxDigital.gov.uk).


Quarterly Update Schedule

Standard quarters:

  • 6 April – 5 July (Submit by 7 August)
  • 6 July – 5 October (Submit by 7 November)
  • 6 October – 5 January (Submit by 7 February)
  • 6 January – 5 April (Submit by 7 May)


Or you can choose reporting in calendar quarters. Details on the

official GOV.UK quarterly update guidance.


How to Prepare for MTD for Income Tax

Step 1: Check if you qualify
Add total gross receipts from self-employment and UK property.

Step 2: Register for MTD
Use your Government Gateway account. HMRC will contact eligible taxpayers after reviewing 2024/25 returns.

Step 3: Choose MTD-Compatible Software
You must use a product from an approved list of software.

Step 4: Start keeping digital records
All business and property records need to be maintained digitally, with digital links between systems (no copy-pasting).

Step 5: Understand quarterly reporting
Quarterly updates require cumulative year-to-date income and expenses for each qualifying source.


Special Guidance: Jointly Owned Property and Income Types

  • Joint owners must each report their share; you may record category totals (not each transaction).
  • Expenses are reported with the annual declaration, not each quarterly update.
  • Joint property rules and details.


What Income Sources Are Covered / Not Covered?

Included:

  • Sole trader profits
  • UK property income (including joint properties)
  • Furnished holiday lets
  • Some foreign property (if UK domiciled)

Excluded:

  • PAYE income
  • Most foreign income (unless UK domiciled)
  • Dividends
  • Savings interest


Penalties

A new late submission penalty system will apply:

  • One point per missed quarterly update, £200 fine when the threshold is reached.
  • Late payment penalties: From 6 April 2025, no penalty if paid within 15 days, 3% penalty from day 16-30, and 10% per annum from day 31 onwards


Contact 10CA today and ensure you’re MTD-ready before 2026.


Get Expert Help

If you need personalised guidance, visit GOV. The UK’s main MTD for Income Tax collection or consult a professional.


Notice: This summary was updated July 2025 from official government sources and is for general information only. Always confirm any compliance action with the current government pages above.


Frequently Asked Questions

  • Do landlords have to comply?

    Yes, if they earn more than the qualifying threshold.

  • Can I use spreadsheets?

    Only if spreadsheets are connected via a digital link to MTD-compatible software.

  • Will partnerships join?

    MTD for partnerships will be introduced at a future date to be announced.

  • Will I still file a Self Assessment?

    Self Assessment remains only for income not in scope for MTD (e.g., dividends, overseas income).

Company tax returns and accounts have gone digital

By Charlie Flockhart • April 21, 2026
HMRC and Companies House have confirmed that from 1 April, all businesses must use compliant, commercial software to file their company’s tax returns. As of 31 March, the free joint online service, commonly known as the CATO portal, from these two Government bodies has been removed and you must now use software to file company tax returns to HMRC. For the time being, you will still be able to file annual accounts at Companies House using third-party software, WebFiling services or paper filing. The decision has been made to end this service as it is “outdated and no longer aligns with modern digital standards”, according to Companies House. This change is in line with the introduction of the Economic Crime and Corporate Transparency Act, which implemented “enhanced corporation tax requirements and changes to UK company law.” It also follows on from a major IT security breach at Companies House, identified in March 2026, that exposed the WebFiling system and allowed some users to potentially access and amend the details of other companies. Although the breach has now been resolved and security strengthened, it has raised concerns about the reliability of GOV.UK One Login service.  Can you still amend previous returns using the free service? HMRC and Companies House have confirmed that now that the free filing service has closed, company directors will have to use commercial tax software if they need to make changes to a previously submitted Corporation Tax return or refile a rejected return. From now onwards, any previously filed financial information will no longer be available in the system, as it has not been retained and will need to be entered again. HMRC has said that, for amendments, it will also be acceptable to send a paper return to the Corporation Tax Services office. If you have previously filed financial accounts with Companies House and you want to make changes or corrections, this will also need to be done via commercial software or by sending paper accounts to Companies House via post. Are there any exceptions to this new rule? Companies can file a paper Corporation Tax return only in limited circumstances, such as if they wish to submit it in Welsh or can demonstrate a valid, reasonable excuse to HMRC. Otherwise, returns must be filed online using commercial software. If you are affected by this change and need help choosing and utilising commercial software to complete your Corporation Tax return, please speak to our team.

Capital allowances - New rules for a new tax year

By Charlie Flockhart • April 21, 2026
Capital allowances continue to provide an effective method for businesses to reduce their tax bills, by providing incentives for investment in eligible expenditure – typically plant and machinery. Historically, these reliefs have been subject to change and the 2026/27 tax year is no different, as the Government moves to alter two key reliefs – Writing Down Allowance (WDA) and a new First-Year Allowance (FYA).  Reduction of the Writing Down Allowance The WDA will be reduced from 18 per cent to 14 per cent on the main pool of qualifying plant and machinery assets. This change has been introduced on two different dates, starting with companies subject to Corporation Tax on 1 April and followed shortly thereafter by those subject to Income Tax, such as sole traders and partnerships, from 6 April. Businesses with large brought forward main pool expenditures are expected to lose the most from the reduction in the main rate of WDA. In the long-term, the change may also reduce incentives for investment in second-hand assets and cars, which benefited under the previous rules. The new First-Year Allowance To offset some of the impact of the reduction in WDA, a new 40 per cent FYA on main rate expenditure, primarily still covering plant and machinery, will now be available. This new FYA is intended to encourage investment in areas where other FYAs don’t allow, in particular, assets bought by unincorporated businesses and leases. Sole traders and partnerships will, for the first time, be able to get additional support at the point of investment, which means that more businesses will be able to reduce their tax bill in the same year as their investment. This is expected to give a quick cashflow boost to those affected and provide additional support for future investments. However, it is important to note that this FYA does not support investment in second-hand assets, cars or leased assets in other countries. Finally, the Government has also confirmed that small business owners will continue to benefit from tax relief on electric vehicles, as the 100 per cent FYA for zero-emission vehicles and charge points has been extended until 31 March 2027 for Corporation Tax and 5 April 2027 for Income Tax. This gives businesses greater certainty when planning ahead, while also providing a strong financial incentive to invest by reducing tax bills upfront. Want to make more of capital allowances? If you think you may be eligible for capital allowances, either due to the changes outlined in this article or more generally, then it is important that you claim the tax relief available to you. If you would like help reviewing the current capital allowances that your business can claim, please get in touch.

Government abolishes work-from-home relief

By Charlie Flockhart • April 21, 2026
Directors and employees claiming work-from-home tax relief will no longer be able to claim it from the start of the new tax year – 6 April 2026. Why is this relief being taken away? The Chancellor announced the removal of the work-from-home relief as part of her latest Autumn Budget. The main reasoning given for the abolition is that it will support the nation’s deficit reduction. HMRC has also said that it no longer believes it is fit for purpose or easy to police. Who could claim work-from-home relief? Work-from-home relief has been utilised by homeworkers since the early 2000s, helping them offset some of the costs of heating, lighting, broadband and other home-office expenses required to complete their jobs. The relief allowed employees and directors to claim a flat rate of £6 per week or a deduction for actual costs. However, those who do not claim the flat fee were required to provide evidence of the exact costs, such as an invoice or bill. Eligibility for the relief only applied to individuals who had no other choice but to work from home. For instance, where the business did not have an office or the daily commute was not feasible. Individuals who simply preferred to work from home did not qualify. Is there any relief still available for home workers? The only remaining tax-free support will be reimbursements made directly by employers. This applies only where the payments relate to demonstrated additional household costs and where the costs are incurred wholly, exclusively and necessarily for employment duties. For anyone still claiming work-from-home relief, it is worth reviewing your position now to understand how this abolishment will impact your take-home pay.