Making Tax Digital (MTD) is a significant initiative from the UK Government aimed at modernising the tax system. This initiative seeks to simplify the tax process for individuals and businesses by requiring MTD-compatible software to maintain digital records and submit tax returns. In this article, we will outline the essential dates and deadlines for MTD, helping you stay on track with upcoming changes.
Key Making Tax Digital Dates
April 2026 - MTD for Income Tax – £50,000 Threshold
The first major MTD requirement for Income Tax will come into effect in April 2026. Sole traders and landlords with a total annual income above £50,000 will be required to use MTD-compatible software for digital record-keeping and to file returns. Quarterly updates will be necessary, detailing all business income and expenditure, alongside a final declaration each year by 31 January.
April 2027 - MTD for Income Tax – £30,000 Threshold
From April 2027, the threshold for MTD for Income Tax will lower to £30,000. Sole traders and landlords with an income above this amount will need to comply with the same MTD requirements, including quarterly updates and a final annual declaration.
From April 2029 or 2030 – MTD ITSA for Businesses with Turnover Above £20,000
In the years following 2027, MTD ITSA is expected to extend to businesses with an annual turnover exceeding £20,000. This phase will further expand the scope of MTD compliance to ensure greater consistency across the UK tax system.
Deadlines for MTD Submissions
Quarterly Submission Deadlines
Once enrolled in MTD, landlords must submit quarterly updates on their income and expenses. The deadlines for these submissions are as follows:
- April 6 – July 5: Submission due by August 5
- July 6 – October 5: Submission due by November 5
- October 6 – January 5: Submission due by February 5
- January 6 – April 5: Submission due by May 5
These quarterly submissions do not involve any tax payments; they are solely informational updates to HMRC.
Final Declaration – January 31 (Following the Tax Year)
After the final quarter, a Final Declaration must be submitted by 31 January each year. This replaces the traditional Self-Assessment Tax Return and confirms the total income, expenses, and tax due for the year.
Conclusion
Staying on top of the key dates and deadlines for Making Tax Digital is crucial for ensuring compliance and avoiding penalties. As the initiative gradually extends to more taxpayers, it is important to be aware of the thresholds and submission requirements that will affect you or your business. By preparing early and making use of MTD-compatible software, you can simplify your tax reporting process and stay aligned with the evolving UK tax system.