Making Tax Digital: Planner & Timeline

Your journey into MTD for self-assessment.

Current timetable

Making Tax Digital (MTD) for VAT

• From April 2022, all VAT registered businesses must retain digital records and submit their VAT returns to HMRC using 'functional compatible software', unless an exemption such as digital exclusion applies. 
• Once in MTD for VAT, a business remains in MTD for VAT unless it Deregisters for VAT.

Our Making VAT Digital Zone contains guides and updates including a Making VAT Digital (MVD) subscriber guide.

MTD for Income Tax

MTD for Income Tax is the second phase of digitising tax record keeping. 

• For 2024-25 and 2025-26: individuals can volunteer to participate in the MTD for Income Tax pilot program. 
• From 6 April 2026: MTD ITSA will be mandated for self-employed businesses and landlords with turnover above £50,000 in 2024-25.
• From: 6 April 2027: MTD ITSA will be mandated for self-employed businesses and landlords with turnover above £30,000 in 2025-26.
• From 6 April 2028: MTD ITSA will be mandated for self-employed businesses and landlords with turnover above £20,000 in 2026-27.
  • The Government is continuing to review the postion for self-employed busineses and landlords with turnover below £20,000.
  • No timetable has yet been introduced for partnerships. 

MTD for Corporation Tax

• In HMRC's Transformation Roadmap, published in July 2025, HMRC confirmed that they do not intend to introduce MTD for Corporation Tax.

A log of MTD as it evolves.

3 November 2025

• HMRC started writing directly to taxpayers who, based on submitted 2024-25 returns, will be mandated into MTD for Income Tax from April 2026. 
• See HMRC now sending MTD mandation letters

29 September 2025

• HMRC has published new guidance on how to apply for an exemption from MTD for Income Tax for those who think they are digitally excluded.
• Existing HMRC guidance on digital exclusion has also been updated to:
  • Give more information on what being digitally excluded means.
  • Explain what to do if a taxpayer is already digitally excluded for MTD for VAT purposes.

See New guidance for taxpayers digitally excluded from MTD

21 July 2025

• Draft Regulations were introduced that legislate for the changes announced in the Spring Statement on 26 March 2025 (see below).
• In HMRC's Transformation Roadmap, published in July 2025, HMRC confirmed that they do not intend to introduce MTD for Corporation Tax.

3 July 2025

HMRC updated its guidance 'Penalties for Making Tax Digital for Income Tax Volunteers' to confirm that the new penalties for late filing and late payment, introduced in Finance Act 2021, will apply to testing phase participants.

• Those signing up to the testing phase will be required to agree to the new penalties.
• Once a taxpayer has agreed to the new penatlies, it will not be possible for them to revert to the previous penalty regime, even if they stop taking part in the testing phase.

See: Penalties: Late Filing MTD and Penalties: Late Payment MTD

26 March 2025

The Spring Statement announced some changes to the roll out of MTD. 

From April 2028: 

• MTD will apply to landlords and sole traders if they have qualifying income of over £20,000. 
• For those affected, this brings forward the date for the implementation of MTD for ITSA from April 2029/2030. 
• The Government intends to continue reviewing MTD and possible 'solutions' for those who have income below £20,000. 

The following cactegories will be exempt from MTD: 

• Taxpayers with Power of Attorney. 
• Non-UK resident foreign entertainers and sportspersons with no income sources that qualify for MTD. 
• Taxpayers for whom a digital service cannot be provided.
• Ministers of religion. 
• Lloyds Underwriters. 
• Those in receipt of Blind Person's Allowance. 
• Those in receipt of Married Couples Allowance. 

Software updates: 

• Previously, there was the option to submit a final Self Assessment return using HMRC's online filing service. 
  • From April 2026, changes will be implemented that require MTD users to submit their Self Assessment return through their MTD software. 
  • Not all MTD software will support both quarterly filing and Self Assessment filing.  
  • MTD users will be able to chose more than one MTD software to meet the Self Assessment filing requirements. 

 Other changes to be brought into effect from April 2026:

• Taxpayers with an accounting date of 31 March will be able to operate MTD from 1 April in the first year of operating MTD. This is to avoid the burden of manual adjustments at the year end. 
• HMRC will be granted the power to cancel or reset late submission penalty points and cancel any associated financial penalties. 
• There will be an increase in late payment penalties for MTD for both VAT and ITSA to encourage taxpayers to pay their tax on time. 
• HMRC will allow users to sign up early to test the service.  HMRC will also offer dedicated support for those signing up early. 

See: More taxpayers into MTD by 2028

 25 February 2025 

• HMRC updated its guidance 'Work out your qualifying income for Making Tax Digital for Income Tax'. Updates include: 
  • Clarifying which sources of income do and do not count towards your qualifying income.
  • Details of how HMRC will assess your income when your accounting period is longer or shorter than 12 months. 
  • How MTD for Income tax will apply if you start a new business.
  • Confirmation that transitional profits arising due to the basis period reform will not count towards qualifying income.
  • Clarifying which sources contribute to your qualifying income if you are UK tax resident and not UK resident.

See, MTD: Toolkit for accountants MTD ITSA Overview tab. 

17 January 2025 

• On 17 January 2025, HMRC issued the Making Tax Digital for Income Tax: digital record-keeping notice. The notice included details of the Quarterly 'update information' that must be provided by jointly let property businesses, retail businesses, and self-employed and property businesses with income under the VAT threshold. 
• The Making Tax Digital for Income Tax: update notice was updated to reflect this information. 

See, Making Tax Digital for Income Tax: digital record-keeping notice

See, Making Tax Digital for Income Tax: update notice

22 April 2024

• On 22 April 2024, HMRC issued updated guidance on Making Tax Digital (MTD) for Income Tax. After a pause in the Pilot in February 2023, HMRC has now confirmed the expansion of the pilot from April 2024.

Check your eligibility using our MTD Income Tax Pilot Tool

15 March 2024 

• The Income Tax (Digital Requirements) (Amendment) Regulations 2024 came into effect. These regulations made several changes to the The Income Tax (Digital Requirements) Regulations 2021. Most notably they, 
  • Amended the date that the principal regulations come into force from 6 April 2024 to 6 April 2026. 
  • Changed the digital start date where a relevant person commences carrying on a business on or after 6th April 2025 and is required to make or deliver a return, the digital start date is 6th April in the year of assessment following the year of assessment in which the person was required to deliver the return.
  • Changed the quarterly deadlines from the 5th to the 7th, to be in line with VAT reporting deadlines. 
  • Quarterly updates will now be on a cumulative basis, allowing errors to be corrected as part of the following update and removing the need to resubmit previous quarters.
  • The End of Period Statement (EOPS) has been removed as a formal requirement.
  • Exemptions for foster carers and those without a National Insurance Number have been introduced.

See, The Income Tax (Digital Requirements) (Amendment) Regulations 2024

22 November 2023

At the Autumn Statement 2023, the government plans to make design changes to Making Tax Digital for Income Tax Self Assessment by:

• Simplifying the requirements for all taxpayers in providing quarterly updates and for taxpayers with more complex affairs, such as landlords with jointly-owned property.
  • Rather than requiring a total for the three months covered by each update, each update will be a cumulative total of income and expenses accumulated for the tax year to date. This should avoid the need for corrections to previous updates when errors have been identified.
  • Joint property owners will be able to decide whether they want to provide quarterly updates or not and will have less onerous digital record-keeping requirements.
• Removing the requirement to provide an End of Period Statement.
• Exempting some taxpayers from MTD altogether, including those without a National Insurance number and foster carers.
• Enabling taxpayers using MTD to be represented by more than one tax agent.
• Draft regulations will be published for technical consultation later in 2023 with a large-scale public beta testing programme commencing in 2025.
• The policy paper confirms that MTD for ITSA will not be extended to businesses with income below £30,000 for the foreseeable future though this will remain under review.

February 2023

• HMRC confirm that the pilot scheme has been closed for new sign-ups. 

19 December 2022:

• Financial Secretary to the Treasury, Victoria Atkins, announces that MTD for ITSA will be postponed until 2026.

15 December 2022:

• An accidental leak from HMRC or fake news? HMRC's MTD ITSA pilot page appeared briefly to say that the pilot will run until 2026. It was then taken down.

More calls for postponement

• The CIOT and ATT have published the results of their MTD survey canvassing the views of tax professionals on Making Tax Digital (MTD) for Income Tax Self Assessment (ITSA). Most respondents did not believe that the rollout could be a success and they suggested that HMRC postpone mandatory MTD filing for at least a year.

November 2022: Calls for postponement

• The Administrative Burdens Advisory Board in their 2022 Annual Report recommend that the whole MTD ITSA project needs to be delayed by at least a year. The board cited five areas of particular concern:

1. "MTD ITSA is a far more complex proposition than MTD for VAT and over four million self-employed individuals and landlords will be required to sign up for MTD ITSA in April 2024. There will be many different combinations of income and expense types in this population, and as many real-life scenarios as possible must be thoroughly tested through the pilot. The restriction of the pilot to businesses with a 5 April year-end is hamstringing the programme. This restriction should be lifted as soon as possible.

2. Basis Period Reform has complicated the picture. 

   As we discuss further below, we can see the merit in this reform as an overall simplification, but 528,000 businesses will have to apportion two years’ accounts to arrive at their taxable profit. Of these, 278,000 businesses will have to estimate their second year’s profit for this calculation. This introduces more complexity for the affected businesses, and we question whether adequate support and necessary easements will be in place.

3. The decision to align the MTD ITSA quarterly reports with the tax year rather than the accounts year was unexpected and potentially adds further complexity.

4. Error correction.

   While an error or omission in an MTD for VAT quarterly return must be corrected in the next return following discovery, we have recently learned that HMRC will require an error or omission in an MTD ITSA return to be corrected by resubmission of the return for the period in which the error or omission arose. This seems inconsistent and will increase still further the number of submissions MTD for ITSA.

5. Other issues.

   The need to authorise multiple agents, how to deal with estimated profits for non-fiscal year-end businesses and the best way to deal with jointly let property all remain unresolved.

   Given the issues mentioned here, all of which have arisen since our last report, the compliance costs and burdens associated with MTD ITSA need to be reassessed, especially insofar as they impact on the very smallest businesses. More importantly, we think the whole MTD ITSA project needs to be delayed by at least a year to allow these issues to be properly addressed and resolved before implementation commences."

See Administration Advisory Board 2022 Report 

1 July 2022 

HMRC have opened a new consultation ‘Tertiary legislation for Making Tax Digital for Income Tax’ inviting views on draft legislation which sets out the requirements for Making Tax Digital (MTD) for Income Tax.

• It confirms that landlords and sole traders who must now join MTD from April 2026 but are under the VAT threshold, will only have to submit three-line accounts to HMRC.
• Those who are over the VAT threshold (£85,000) will have to submit income and expenses by category with property income split between UK and overseas, Furnished Holiday Lets and other types of letting, and FHL's split between UK and EEA holiday let businesses. 

September 2021: Update on Making Tax Digital

• In an update to Parliament, the Treasury announced that MTD for ITSA will be delayed until April 2024.
• General partnerships will not be mandated to join MTD for ITSA until April 2025. The date for all other partnerships is yet to be confirmed.
• The new penalty system, due to take effect from April 2023, will also be delayed until April 2024 for MTD for ITSA-mandated taxpayers and April 2025 for all other ITSA taxpayers.
• In line with the other delays, the proposed changes to basis periods will also move to April 2024, with no transitional rules having effect until 2023 at the earliest. 
• See: Update on Making Tax Digital

July 2021: Basis period reform

• In July 2021, HMRC opened a Consultation that proposes to reform the basis period rules by allocating trading profit to tax years regardless of the business’ accounting period end date. 2022-23 will be a transition year, with profits being reported up to 5 April 2023.
• Should this reform go ahead, it is likely that businesses will be mandated into MTD for Income Tax from 6 April 2023, regardless of their accounting period end.
• See Basis period reform: What could it mean for MTD?

February 2021: MTD for Income Tax policy update

• Via HMRC's Developer Hub, a policy update was issued in early 2021. 
• All Income Tax taxpayers earning more than £10,000 in business and property income per year will join MTD from April 2023.
  • Trusts, estates, trustees of registered pension schemes and non-resident companies will not be included. 
  • Mixed partnerships, limited partnerships and limited liability partnerships will join at a later date. 
• Early draft regulations suggest that: 
  • Separate reports will be required for each type of property business (e.g. Furnished Holiday Lets, long-term lets and overseas property businesses). 
  • Four in-year reports in respect of each business must be made within one month of each business quarter-end. 
  • A fifth 'end of period statement' will also be made. 

November 2020: MTD proposals for companies

• From April 2024 companies can start using a MTD for Corporation Tax (CT) pilot scheme.
• From April 2026 companies join MTD for CT.
• See Consultation: Making tax digital for companies

July 2020: New timeline announced for Making Tax Digital for Business

• VAT-registered businesses with a taxable turnover below £85,000 will be required to follow Making Tax Digital rules for VAT for their first return starting on or after April 2022.
• Self-employed businesses and landlords with business turnover above £10,000 will need to follow the rules for MTD for Income Tax from their (current or next account period) following April 2023.
• Businesses that cannot go digital will not be required to do so.
• Businesses can choose to use spreadsheets to both maintain digital records and perform tax calculations, provided the spreadsheets combine with some form of ‘bridging’ software that will allow their VAT return data to be sent to HMRC from the spreadsheet.
• HMRC is going to consult in the Autumn on the detail of extending Making Tax Digital to incorporated businesses with Corporate Tax obligations.

March 2020

• As a result of the Coronavirus (COVID-19) the 'soft landing period' to implement Making Tax Digital for VAT digital links was extended to 31 March 2021.
• Previously there were two start dates, from 1 April 2020, or 1 October 2020 for deferred businesses. Now all businesses will not be required to have digital links between software programs until their first VAT Return period starting on or after 1 April 2021.
• See COVID-19: Government support tracker

March 2019

• Making Tax Digital for Business: the Chancellor confirmed in his Spring Statement that the government will not be mandating MTD for any new taxes or businesses in 2020. 

February 2019

• It is currently proposed that VAT-registered businesses trading above the VAT threshold are mandated to file VAT returns by using functional compatible software from April 2019.
• The MVD pilot continues to roll out, see MVD pilot: Who can join?
• Agents are encouraged to open a new Agent Services Account. There is widespread confusion as the accounts don't do anything yet.
• Plans for Making Tax Digital for Self Assessment are on hold.

November 2018

• HMRC commenced sending out MVD letters to VAT-registered businesses encouraging them to take up MVD software and register with MVD.
• Budget 2018: proposals to introduce a new late interest and late payment points-based penalties system for MVD have been postponed. They were omitted from Finance Bill 2019. It is now anticipated that the new system will be postponed until 2021.

October 2018

• HMRC announced that they are allowing the following businesses to defer from the requirements of Making VAT Digital (MVD) until 1 October 2019. See Making VAT Digital: New Timetable.
• The MVD pilot was first opened to certain businesses on 16 October 2018. See MVD: When to join the pilot.

July 2018

HMRC Published the results of a number of its different research projects looking at digital services.

HMRC published VAT Notice 700/22: Making Tax Digital for VAT. 

• Highlights of the notice include the requirement to use 'functional compatible software'.
• From 2020 the use of 'copy and paste' is to be banned! Software must electronically link from other bookkeeping records such as spreadsheets into MTD software. This is to allow HMRC to interrogate the underlying records such as the spreadsheet.

Draft Finance Bill 2019 contained proposals for three new tax penalty systems which were dropped following the budget 2018. HMRC have said that they will be included in a future finance bill.

The penalty proposals are:

• Late filing: a points-based system, see Penalties: Late submission (MTD).
• Late payment: no penalties if tax is paid within 15 days, increased penalties as further time elapses, see Penalties: Late payment (MTD).
• Late payment interest supplement (VAT): See VAT Interest harmonisation.

HMRC also published policy papers and follows consultations: MTD: Sanctions for late submission and payment and consultation, Making Tax Digital: Interest harmonisation and sanctions for late payment. 

MTD background

• Provisions included in draft Finance Bill 2019 for new penalty systems were dropped in November 2018 and are to be included in a future finance bill.
• HMRC consulted on draft secondary and tertiary MTD legislation together with draft guidance on Making Tax Digital for VAT. The consultation closed in November 2017. 
• Finance (No2) Act 2017 allowed HMRC to introduce MTD via secondary legislation (statutory instrument). The significance is that this form of legislation is not scrutinised by parliament.
• On 13 July 2017, the government announced that MTD would be delayed for business until 2020, with the exception of VAT. An updated timetable for MTD:
  • 2019: VAT-registered businesses are mandated into MTD except for the digitally excluded.
  • 2019/2020: all businesses may try MTD voluntarily.
  • 2020: non-VAT registered unincorporated businesses and landlords join MTD.
  • 2020+ ?: Companies and Large Partnerships to join MTD.
  • Note that the digitally excluded and micro-businesses (t/o <£10,000) are excluded from MTD.
• Consultation on new MTD penalties closed on 11 June 2017. The different tax bodies all hold different views of the proposed regimes, see MTD penalties responses compared.
• May 2017: the MTD provisions were cut from the Finance (No 2) Bill 2017 due to the decision to call an early general election. 
• March 2017: draft regulations on MTD to be published during summer 2017.
• Andrew Tyrie, chair of the House of Common’s Treasury committee, wrote to the Administrative Burdens Advisory Board concerned that HMRC’s estimate on the cost of Making Tax Digital of £280 is unrealistic. The Federation of Small Businesses estimates that the cost of adding four extra returns will be three times the annual cost for business.
• HMRC commenced a small-scale MTD pilot in April 2017.
• The House of Lords Finance Bill sub-committee recommended that HMRC put the brakes on MTD for business: it's being rushed, there's little benefit to the government and it creates unnecessary burdens on small businesses.
• In the Spring Budget 2017, it was announced that MTD will be postponed by one year (i.e. to 2019) for those self-employed and landlords who have a turnover under the VAT threshold. 
• MP Andrew Tyrie who sits on the Economic Committee of the House of Commons stood up following the budget speech to suggest that 'now that the door is ajar...[on MTD],' that perhaps other changes to HMRC's MTD plans could be now considered.
• January 2017: HMRC published responses to their consultations: 
  • ‘Making Tax Digital: Voluntary pay as you go'
  • ‘Making Tax Digital: Tax administration’
  • 'Bringing business tax into the digital age'
    • Nichola Ross Martin's comments. 

Useful guides on this topic

Making Tax Digital for Income Tax: Data required by HMRC
What information do you need to 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?

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 HMRCs 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.

Deregistration
When do I have to deregister for VAT? When can I voluntarily deregister? What penalties might HMRC issue if I am late notifying them of mandatory deregistration?

Making VAT Digital
Making Tax Digital for VAT, or Making VAT Digital (MVD) this section sets out who needs to follow the MVD rules, what software to use, what records to keep, and what agents need to do.

External links

MTD: Written evidence to the House of Lords
Our submission to the House of Lords sub-committee on Finance Bill 2016.

Tertiary legislation for Making Tax Digital for Income Tax

Use Making Tax Digital for Income Tax

Legislation 

The Income Tax (Digital Obligations) Regulations 2026 (Draft)

The Income Tax (Digital Requirements) (Amendment) Regulations 2024 

 The Income Tax (Digital Requirements) Regulations 2021.