Making Tax Digital for Income Tax – Region: UK
Making Tax Digital for Income Tax (MTDFIT)
HMRC is rolling out a new digital reporting regime, Making Tax Digital for Income Tax (MTDFIT), starting April 2026.
What is MTDFIT?
If you’re an unincorporated sole trader or landlord with a combined turnover of £50,000 or more, you’ll need to keep digital records and submit updates to HMRC every quarter using HMRC-approved software.
From April 2027, the threshold will reduce to £30,000, bringing more taxpayers into scope.
Important: While submissions will become quarterly, your tax payments will remain on the same schedule – once or twice a year.
What will change under MTDFIT?
1. Quarterly submissions
From April 2026, you’ll need to file updates by the following deadlines:
- 7 August
- 7 November
- 7 February
- 7 May
At the end of the tax year, a final declaration (replacing your annual self-assessment return) must be submitted by 31 January. This allows for adjustments to ensure your records are correct.
2. Mandatory software use
Submissions can only be made using HMRC-approved accounting software. Paper returns and the current online self-assessment system will no longer be available for those within scope.
Do you need to comply?
You’ll be required to join MTDFIT if:
- Your 2024/25 self-assessment (submitted by 31 January 2026) reports qualifying turnover over £50,000. HMRC will notify you by letter if you are affected.
- From April 2027, this applies to turnover above £30,000.
If your turnover is below these thresholds, you’re not affected – at least for now.
You can also check eligibility using HMRC’s online checker tool. HMRC may send “pre-mandation” letters from April 2025 if they believe you’ll be within scope.
What if you don’t comply?
MTDFIT is mandatory. Failure to comply will mean you cannot use the old annual method.
Penalties include:
- A points system for late or missed submissions, with a £200 fine once a threshold is reached.
- Points remain on your record for two years unless you maintain full compliance for 12 months.
- A one-off penalty if you don’t use compatible software.
How DAS Accounting can help
These changes may feel overwhelming, but with the right preparation they can be managed smoothly.
Call our team on 020 8396 7353
Email us at uk@dasaccounting.com
We’ll help you choose the right software, stay compliant, and make the transition to digital reporting as stress-free as possible.
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