Making Tax Digital (MTD) for Self Assessment is a UK government initiative that requires self-employed individuals and landlords with income over £50,000 to keep digital records and submit quarterly updates to HMRC using MTD-compatible software.
It will apply from April 2026, with those earning between £30,000 and £50,000 joining from April 2027. The aim is to make the tax system more efficient, accurate, and easier for taxpayers.
No, not yet. While quarterly updates are required, HMRC isn’t (yet) asking for quarterly tax payments. However, penalty points will apply for late or missed updates, and once enough points are accumulated, financial penalties could follow.
Currently, it is only rental income and self-employment income that are included if they exceed the threshold. This also includes foreign property income.
The threshold is cumulative. Therefore, if you earn £25k from self-employment and £25k from property, you will meet the requirements to register for MTD.
Yes. Mandation will be based on known income at the start of the regime (6 April 2026), and individuals will need to comply for at least 3 years, even if their income later falls below the threshold.
Absolutely. Voluntary participation is encouraged, especially now, during the testing which can help both advisers and clients become familiar with the new system.
No. Partnership income is not within the scope for MTD at this stage.
Yes, foreign property income counts towards the qualifying threshold alongside self-employment income and UK property income.
Currently, foster carers are exempt from MTD even if their qualifying income exceeds this threshold.
Quarterly updates are due 1 month and 7 days after the end of each quarter.
Any qualifying individual can choose their reporting quarters on sign-up, but changes can only be made at year-end, not during the year. So it is vital to ensure the correct date is picked.
Yes. However, a bridging software must be used to connect spreadsheet data to HMRC’s systems for submission.
Yes. Quarterly updates are cumulative, so adjustments can be made in the following update if something was missed in the earlier period. This is all finalised in a self-assessment tax return.
Unfortunately, HMRC argue that age alone isn’t a valid exemption. HMRC looks at individual circumstances and capability. If applying for an exemption, provide a full context, simply stating an age will not suffice.
Only if they meet very specific exemption criteria, such as digital exclusion. These criteria will be outlined on Gov.uk. Otherwise, participation is legally mandatory.
HMRC has pledged enhanced support, especially for those joining testing this year. It’s a great opportunity for taxpayers and their agents to gain early access to extra guidance and feedback.
No. If an individual currently reports both under one property income entry on their SA return, they should do the same in MTD quarterly updates.
Yes. MTD for VAT and MTD for ITSA are separate obligations. However, digital records can often overlap, especially if they cover the same income streams.
Better accuracy, improved record-keeping, fewer lost receipts, and access to real-time financial data. This helps both tax compliance and business decision-making.
HMRC can offer more accurate tax estimates, pre-populate data, and reduce future discrepancies, leading to smoother year-end processing.
Yes. Software costs are allowable expenses, just like any other tool or service used in the course of business.
HMRC will not provide its own software but has confirmed that some free options will be available from third-party developers, suitable for basic needs.
Yes, this is possible as long as both are properly authorised agents with access. Coordination is key to avoid submission issues.
Bridging software must be HMRC-recognised and able to link digital records (e.g., from Excel) to the MTD platform to submit updates and End of Period Statements.
Even if income is irregular, quarterly updates must still be submitted. They may contain zero income or expenses for that period, which is acceptable.
They will need to submit a separate set of quarterly updates for each business or property type (e.g., one for self-employment, one for UK property).
Yes – as long as the systems are compatible with MTD and can successfully submit each quarterly update and EOPS, this is allowed.
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