Making Tax Digital (MTD) is HMRC’s initiative to modernise the UK tax system by making it fully digital. The goal is to simplify tax administration, reduce errors, and make compliance easier for taxpayers.
If your 2024/25 tax return shows £50,000 or more in combined self-employed and/or property income, you’ll need to switch to Making Tax Digital (MTD) for Income Tax from 6th April 2026. You will have to submit quarterly updates to HMRC in addition to one annual tax return. ETC can guide you through this process, providing Making Tax Digital UK support every step of the way.
What’s next after registering for MTD? You will then need to:
Keep digital records of your income and expenses using HMRC-approved software
Submit quarterly updates to HMRC
Complete a final annual declaration at the end of the tax year
Additionally, Express Tax Claims (ETC) can handle all the calculations and submissions for you. This ensures your records remain accurate and up to date, giving you peace of mind.
When Will MTD Affect You?
Phase 1: From 6 April 2026 – for the 2026/27 Tax Year:
Anyone whose 2024/25 tax return shows £50,000 or more in combined self-employment and property income.Phase 2: From April 2027- for the 2027/28 Tax Year:
Anyone whose 2025/26 tax return shows £30,000 or more in combined self-employment and property income.
Phase 3: April 2028 – for the 2028/29 Tax Year:
Anyone whose 2026/27 tax return shows £20,000 or more in combined self-employment and property income.
ETC can manage each phase for you, helping ensure you stay compliant and never miss a deadline.
Why Choose ETC for MTD?
We simplify digital record keeping, making quarterly submissions straightforward.
- We have the specific software HMRC require to register for MTD.
Our team ensures your final annual declaration is accurate.
We provide proactive reminders, so you never miss a deadline.
ETC’s expertise reduces the risk of errors and penalties.
For more information on MTD, timeframes and what to do next, visit our Making Tax Digital page.
Contact us today for expert support with Making Tax Digital UK compliance and let ETC manage your submissions efficiently.
FAQ
Do I still need to submit a final tax declaration under MTD?
Yes, after completing quarterly updates, a final declaration for the full tax year must still be submitted to HMRC.
What happens if I miss a quarterly submission under MTD?
HMRC uses a points-based penalty system. Missing deadlines can lead to penalty points and fines. ETC can help ensure your updates are submitted on time.
Are late payment penalties different under MTD?
Yes, penalties for late payments are separate from submission penalties and can include interest and fines. ETC can help manage your deadlines to avoid these charges.
How does MTD affect people with multiple businesses?
You must keep separate digital records for each business. ETC can consolidate reporting and ensure all submissions are compliant.
Does MTD apply to partnerships?
Currently, partnerships are not required to use MTD for Income Tax.
Is income from foreign property included in MTD?
Yes, rental income from UK and foreign property is in scope and must be included in your digital records.
Can I include PAYE or employment income in my MTD submissions?
PAYE income does not need to be reported via MTD quarterly updates, but ETC can advise if multiple income streams affect your calculations.
How will MTD work if I have self-employment and rental income?
Both income streams must be recorded digitally, and quarterly updates submitted. ETC can manage multiple streams for you.
What counts as “digital records” for MTD?
Income, expenses, and other financial transactions must be recorded using HMRC-approved MTD software. ETC use HMRC approved software and will set up compatible solutions.
Do I need to buy software to comply with MTD?
No, ETC subscriptions include access to MTD-compatible software, removing the need to purchase your own.
