Making Tax Digital for Income Tax FAQs

Here we share frequently asked questions regarding Making Tax Digital for Income Tax.

Am I Affected by MTD for Income Tax?

If you are self employed or have rental income which combined turnover (qualifying income) in excess of specific thresholds, you are affected by MTD for IT.

What are the thresholds and when does it start?

• Qualifying income above £50,000 from 6^th April 2026
• Qualifying income above £30,000 from 6^th April 2027
• Qualifying income above £20,000 from 6^th April 2028

What does MTD entail?

• You must keep digital records of self employment or rental transactions
• Submit income and expenses to HMRC quarterly
• Still submit a final declaration (tax return) by 31^st January the following year

When should I sign up for MTD?

You should sign up for MTD prior to 6^th April of the relevant year that you are affected. If you are affected from 6^th April 2026, sign up as soon as possible in preparation for yourself or your advisor.

You can sign up to MTD now using the following link Sign up for Making Tax Digital for Income Tax – GOV.UK

How do I keep digital records?

You will need to use an MTD compliant software, such as Xero to keep digital records and make the quarterly submissions to HMCR through this software. HMRC are not providing tax payers with this software.

Can I still use spreadsheets?

You can still use spreadsheets but a bridging software will be required in order to create the digital link to HMRC.

What will the quarterly update include?

The quarterly update will include a summary of your income and expenses relating to your sole trade business or rental properties from that quarter. The quarterly submissions are not a full tax return and do not require complex accounting adjustments.

When are the submission deadlines for quarterly updates?

• 6 Apr – 5 Jul: Due 7 August
• 6 Jul – 5 Oct: Due 7 November
• 6 Oct – 5 Jan: Due 7 February
• 6 Jan – 5 Apr: Due 7 May

When do I pay HMRC my tax?

Tax payment dates will remain unchanged. The deadline for balancing payments and first payments on account will remain 31^st January and the second payment on account still due 31^st July.

Can I be exempt from MTD?

There are exemptions to MTD for certain tax payers.

Are there penalties for missed filings?

There will be a points based system in place for missed or late filings. 1 point will be given for each missed or late deadline, and an accumulation of 4 points can result in a £200 fine.

Can Whitings LLP deal with MTD for IT for me?

Whitings LLP are glad to be offering three levels of service for our clients in relation to MTD as follows:

• Fully managed
• Semi-Managed
• Self managed

Get In Touch

If you have further questions, please contact your local Whitings LLP office or your usual Whitings contact and we will be happy to help you.

Disclaimer - All information in this post was correct at time of writing.