What information should you submit under Making Tax Digital for Income Tax? What are the requirements for relevant persons under the VAT threshold? What are the categories of information required?
This is a freeview 'At a glance' guide to the 'update information' that relevant persons will be required to submit for Making Tax Digital (MTD) for Income Tax.
- From April 2026, MTD for Income Tax will start to become mandatory for self-employed businesses and landlords; the relevant dates are:
- From 6 April 2026: MTD ITSA applies to individuals with business turnover above £50,000 in 2024-25.
- From 6 April 2027: MTD ITSA applies to individuals with business turnover above £30,000 in 2025-26.
- From 6 April 2028: MTD ITSA applies to individuals with business turnover above £20,000 in 2026-27.
See: Making Tax Digital: Index & timeline.
- HMRC has finalised categories of 'update information' that relevant persons within the charge to Income Tax must provide. Each quarterly update must include:
- The quarterly update period start date.
- The quarterly update period end date.
- Totals of the amounts falling within income and expenses, in the categories set out below.
Important: This list has been updated and major changes are noted. Where HMRC have removed a requirement we have kept it in the lists below but the item will have been struck through e.g. alerting readers to ongoing changes.
- The quarterly update must be submitted by the 7th of the month following the end of the relevant quarter.
- Relevant persons under the VAT threshold may choose to categorise their digital records of income and expenses in less detail. Where under the VAT threshold:
- Self-employed and landlords are only required to submit two figures, total income and total expenditure instead of the totals of the amounts falling within each category listed. This option is also available to a relevant person(s) who jointly let property.
- Each individual item of income and expenditure still needs to be recorded but can be categorised as either 'income' or 'expenditure'.
- If there are residential property finance costs i.e. a mortgage, landlords will be required to create a separate digital record for these costs.
- Relevant persons over the VAT threshold must provide totals of the amounts falling within the categories listed below.
- Retailers can choose to create a digital record of daily gross takings, instead of individual sales (See, Retail businesses).
Non-property businesses
Income
- Turnover, takings, fees, sales or money earned.
- Any other business income.
Expenses
- Cost of goods bought for resale or goods used.
- Construction industry: payments to subcontractors.
- Wages, salaries and other staff costs.
- Car, van and travel expenses.
- Rent, rates, power and insurance costs.
- Repairs and renewals of property and equipment.
- Phone, fax, stationery and other office costs.
- Advertising.
- Business entertaining costs.
- Interest on bank and other loans.
- Bank, credit card and other financial charges.
- Irrecoverable debts written off.
- Accountancy, legal and other professional fees.
- Depreciation and loss/profit on sale of assets.
- Other business expenses.
- Consolidated expenses.
Property businesses (each business being reported separately)
Property businesses UK
Income on property
- Total rents.
- Other income from property.
- Premiums for the grant of a lease.
- Reverse premiums and inducements.
Expenses for property
- Rent, rates, insurance, ground rents.
- Property repairs and maintenance.
- Non-residential property finance costs [new heading].
- Residential property finance costs [new heading].
- Residential finance costs brought forward [new heading].
- Legal, management and other professional fees.
- Costs of services provided, including wages.
- Travel expenses [new heading].
- Other allowable property expenses.
- Consolidated expenses
Property businesses overseas
Income on property
- Total rents.
- Other income from property.
- Premiums for the grant of a lease.
Expenses for property
- Rent, rates, insurance, ground rents.
- Property repairs and maintenance.
- Non-residential property finance costs [new heading].
- Residential property finance costs [new heading].
- Unused residential property finance costs [new heading].
- Legal, management and other professional fees.
- Costs of services provided, including wages.
- Travel expenses [new heading].
- Other allowable property expenses.
- Consolidated expenses
Jointly let property business (new)
- Relevant persons with property income and profits from a jointly let property may choose one of three approaches to their record keeping
- Item-by-item record keeping, categorising each item according to the property income and expenses categories (as outlined under Property Businesses UK and Property businesses Overseas above). The quarterly updates will show totals for each of the categories.
- Enter one quarterly figure for each of the income categories and one annual figure for each of the expense categories.
- Make just one entry per quarter for ‘income’ and just one entry per annum for ‘expenses’.
Retail businesses
A relevant person can choose to submit a single record of their total daily gross retail sales, rather than each individual sale, for their retail business.
The digital record for gross daily retail sales must include:
- All payments as they are received by the relevant person or on the relevant person’s behalf, from its own cash-paying retail consumers. This includes payments by cheque, debit or credit card, Maestro, Visa or similar electronic transactions and electronic cash.
- The full value of all credit or other non-cash retail sales received by the relevant person or on the relevant person’s behalf. This includes the full value of credit sales, the cash value of payment in kind for retail sales, the face value of gift, book and record vouchers received and any other payments for retail sales, including those sales completed via third-party online sales platforms.
The following may be excluded when calculating the amount of daily gross takings:
- Counterfeit notes.
- Illegible credit card transactions.
- Inadvertent acceptance of foreign currency (where discovered after their acceptance).
- Inadvertent acceptance of out-of-date coupons which are not honoured by promoters.
- Instalments in respect of credit sales.
- Receipts recording for supplies which are to be recorded outside of the election.
- Refunds to a consumer for overcharges or faulty/unsuitable goods.
- Float discrepancies.
- Unsigned or dishonoured cheques from cash customers.
- Use of training tills.
- Void transactions.
- Any other income that is not included in the gross daily retail sales digital record [new].
Useful guides on this topic
Making Tax Digital: Index & timeline
When does Making Tax Digital (MTD) apply? What does Making Tax Digital really mean? How will it affect you? Does MTD mean quarterly reporting? Is my business exempted from Making Tax Digital?
Compare software for Making Tax Digital for Income Tax
What's the cheapest software I can use for Making Tax Digital for Income Tax? What is the best value software that I can use?
MTD: Toolkit for accountants
What is the current timetable for Making Tax Digital? How will it work? Which clients will be excluded? What planning needs to be undertaken?
Making Tax Digital: Survival guide (for the self-employed & landlords)
This is a freeview factsheet for the many self-employed taxpayers, company owners and property landlords who are unaware of HM Revenue and Custom's radical plans to transform the tax online filing system.
MTD: Income Tax Pilot Tool
Making Tax Digital (MTD) for Income Tax. Are you eligible to take part in the MTD Pilot?
VAT thresholds
Certain thresholds must be reached for either the registration or deregistration of VAT.
External link
Making Tax Digital for Income Tax: digital record-keeping notice
Making Tax Digital for Income Tax: updated notice
Regulations 6 and 8 of The Income Tax (Digital Requirements) Regulations 2021 as amended by The Income Tax (Digital Requirements) (Amendment) Regulations 2024 list the categories of 'update information'.