The way that some self-employed taxpayers report their business profits to HMRC is set to change under the Making Tax Digital (MTD) for business regime, when it begins to apply to Income Tax reporting.

This is a freeview 'At a glance' guide for the many self-employed taxpayers, company owners and property landlords who are unaware of HMRC's radical plans to transform the tax online filing system. 

At a glance

Background: MTD for VAT

  • MTD for VAT was extended to all VAT registered businesses from April 2022. 
  • Under MTD for VAT, you must retain digital records and submit VAT returns to HMRC using 'functional compatible software'.

See Making VAT Digital

MTD for Income Tax Self Assessment

  • Under MTD, the Self Assessment tax return will be replaced by five new reporting obligations made during and after the tax year. There will be quarterly updates required and a year-end final declaration.
  • This measure was due to commence for accounting periods starting on or after 6 April 2023 for self-employed businesses and landlords with business turnover above £10,000. This has been delayed and the new start date is 6 April 2026 for businesses and landlords with income over £50,000 and 6 April 2027 for those with income over £30,000 (regardless of accounting period end date).
  • In most cases, MTD will not start until 6 April of the third year of trading for businesses that commence on or after 6 April 2026/6 April 2027. 
  • Non-UK resident or domiciled individuals will have to follow MTD where they have UK self-employment and/or UK property and meet the turnover threshold.
  • UK residents will have to follow MTD if they have foreign property income that meets the threshold (may be combined with other self-employment or UK property turnovers).
  • See MTD: Toolkit for accountants for detail of how this start date may interact with the proposed Reform of basis periods
  • Digital records of all transactions will be needed. These will form the basis of the quarterly updates.
  • If you are not already using software for your record-keeping/accounting, you will need to learn how to use a spreadsheet or some type of accounting software or App which is MTD compliant.
  • You will need a reliable internet connection and a facility to store your electronic data.

Five tax returns per year

  • Quarterly updates must be submitted to HMRC, with everyone adhering to the following quarter dates:
Quarter  Period Deadline
 1  6 April - 5 July   5th August
 2  6 July - 5 October  5th November
 3  6 October - 5 January  5th February
 4  6 January - 5 April  5th May
  • An election can be made to change to calendar quarters, which will stay in place until withdrawn. The filing deadlines will remain the same.
  • An End of Period (EOP) statement must be then made for the relevant period, containing all the required information and a declaration that the information is correct and complete to the best of the taxpayer's knowledge.
  • The EOP must be filed by 31 January following the relevant tax year unless later under s8 or s8A TMA 1970.

Tax payments

  • The tax liability will need to be paid by 31 January of the next year (as is currently the case).
  • You will be allowed to voluntarily pay your taxes as you go: the detail is still being decided.
  • Eventually, it is possible that you will be required to make four payments per year on account of tax.


  • There will be no late filing penalties for at least a year while the new system beds in. After that, you will suffer penalties if you file your returns late.
  • Penalties already apply for errors in returns or documents.
  • Late payment interest already applies.
  • See Penalties: Making Tax Digital

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