Making Tax Digital (MTD) is a government initiative designed to modernise the UK tax system.
MTD is being rolled out in stages, starting with VAT, and will soon apply to sole traders and landlords. So, if you run a small business, work for yourself, or earn income from property, it’s essential to understand when your MTD obligations begin and what actions you need to take.
In this guide, we’ll outline all key Making Tax Digital deadlines and show you how to stay compliant and avoid penalties.
What does Making Tax Digital mean?
Making Tax Digital (MTD) requires certain taxpayers to keep digital records and submit tax information to HMRC using approved accounting software.
The goal is to create a more efficient and transparent tax process. In practical terms, this means you’ll need to:
Keep business and tax records digitally rather than manually
Use software that connects directly with HMRC
Submit updates digitally online rather than filing paper returns
These rules already apply to VAT-registered businesses, and they’ll soon come into effect for sole traders and landlords. We’ve outlined all key dates in the MTD rollout in the next section.
Making Tax Digital timeline
MTD is being introduced in stages, with different requirements coming into force over several years. Here’s how the rollout is structured, including phases already in effect and those still to come:
Date | Who it applies to | What’s required |
|---|
| VAT-registered businesses with turnover above £85,000 | VAT records must be kept digitally and VAT returns must be submitted to HMRC through MTD-compatible software. |
| All VAT-registered businesses, regardless of turnover | VAT records must be kept digitally and VAT returns must be submitted to HMRC through MTD-compatible software, even if turnover is below £85,000. |
| Sole traders and landlords earning over £50,000 | Income and expense records must be kept digitally, and quarterly updates must be submitted to HMRC through MTD-compatible software. |
| Sole traders and landlords earning over £30,000 | Income and expense records must be kept digitally, and quarterly updates must be submitted to HMRC through MTD-compatible software. |
| Sole traders and landlords earning over £20,000 | Income and expense records must be kept digitally, and quarterly updates must be submitted to HMRC through MTD-compatible software. |
Good to know: MTD will not apply to Corporation Tax, but HMRC is developing an approach to modernise CT administration in the future. As such, it’s worth maintaining digital records in preparation for any upcoming changes.
Next, we’ll take a closer look at the most important MTD deadlines for each group of taxpayers.
Making Tax Digital deadlines
Deadlines for VAT-registered businesses
If your business is VAT-registered, you must already be compliant with Making Tax Digital rules. This means keeping VAT records digitally, maintaining Digital Links between all parts of your record-keeping system, and submitting VAT returns using HMRC-recognised software.
VAT returns are usually submitted on a quarterly basis. Each return must be submitted one month and seven days after the end of your VAT period. For example:
For the VAT quarter ending 31 March, returns must be submitted by 7 May
For the VAT quarter ending 30 June, returns must be submitted by 7 August
For the VAT quarter ending 30 September, returns must be submitted by 7 November
For the VAT quarter ending 31 December, returns must be submitted by 7 February
If you’re not sure what submission cycle you’re on, check your VAT certificate or accounting software for your VAT period dates.
What are Digital Links? If you use more than one piece of software or multiple spreadsheets to manage your VAT data, these must be connected electronically. Figures must flow automatically between systems (for example via APIs, imports, or bridging software); you can’t manually copy and paste numbers. Digital Links have been mandatory for VAT since April 2021.
Action points for VAT-registered businesses:
Here’s how to ensure you’re MTD compliant and meeting all Making Tax Digital deadlines:
Check you’re registered for Making Tax Digital (most VAT-registered businesses were automatically enrolled by HMRC)
Keep VAT records digitally from the start of each VAT period
Ensure all systems are connected by compliant Digital Links — no manual data transfers
Submit each VAT return via MTD-recognised software within one month and seven days of the period end
Keep digital records and VAT return confirmations for your own records
Deadlines for sole traders and landlords (MTD for ITSA)
The next stage of the Making Tax Digital rollout will apply to Income Tax Self Assessment (ITSA). Instead of filing one annual Self Assessment return, sole traders and landlords will need to keep digital records and send quarterly updates to HMRC through MTD-compatible software.
The rollout begins in April 2026, applying first to those with higher income levels before extending to lower income groups over the following years.
Here are the key Making Tax Digital deadlines to note if you’re a sole trader or landlord:
From April 2026 onwards, MTD will apply to sole traders and landlords with a combined business and/or property income over £50,000
From April 2027 onwards, MTD will apply to sole traders and landlords earning over £30,000
From April 2028 onwards, MTD will apply to sole traders and landlords earning over £20,000
Each year will be divided into four quarterly reporting periods, with submissions of quarterly updates due one month after the end of each period. The current schedule set by HMRC is as follows:
Reporting period | Quarterly update submission deadline |
|---|
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In addition to these quarterly updates, you’ll need to complete two further submissions each tax year:
End of Period Statement (EOPS): This summarises all income, expenses, and adjustments for each business or property. It’s due by 31 January following the end of the tax year (so, for the tax year ending in April 2026, your EOPS would be due on 31 January 2027).
Final Declaration: This confirms your total income and tax liability for the year, and is also due by 31 January after the end of the tax year.
Note that if you have multiple sources of income — say, two businesses and a rental property — you’ll need to keep digital records and file quarterly updates for each source individually.
Action points for sole traders and landlords:
Here’s how to prepare for, and stay on top of, Making Tax Digital deadlines for ITSA:
Check which income level you fall into so you know exactly when your MTD phase will begin
Start keeping digital income and expense records ahead of your first MTD reporting period
Choose HMRC-recognised software that supports MTD for ITSA (and test your setup early to iron out any kinks)
Plan for quarterly updates due on 5 August, 5 November, 5 February and 5 May each year (it’s worth setting calendar reminders well in advance)
File your End of Period Statement and Final Declaration by 31 January following the end of the tax year
How to prepare for MTD
Once you know which Making Tax Digital deadlines apply to you, the next step is to get your digital infrastructure set up. Here’s how to prepare for MTD.
Get set up with HMRC-recognised accounting software
You’ll need MTD-compatible accounting software to keep digital records and submit updates to HMRC. This can be a full accounting platform, or bridging software that links your existing spreadsheets to HMRC.
If you want to keep things as simple as possible, opt for a platform like Tide which offers fully MTD-compliant accounting software alongside a free business bank account. You can manage all your finances in one place, automate bookkeeping and invoicing, and access built-in tools that help you stay aligned with all MTD requirements.
Maintain Digital Links
If you use multiple systems or spreadsheets to manage your accounts, they must be connected via Digital Links (i.e. data must transfer electronically between systems). This is already mandatory for VAT and will also apply to MTD for Income Tax.
Move to digital record-keeping
Start logging your income and expenses digitally from the beginning of each accounting period. Keeping on top of your records as you go, rather than at year-end, will reduce errors and make quarterly submissions much easier.
Set reminders for all key Making Tax Digital deadlines
Add your MTD submission dates to your calendar now, including quarterly updates and annual statements. This ensures you have plenty of time to prepare for upcoming deadlines.
Additional support and resources: If you need help getting started, HMRC offers free MTD webinars, online guides, and a helpline for small businesses. You can also work with an accountant or bookkeeper who is already supporting clients with MTD compliance.
Common mistakes to avoid (and penalties for missed Making Tax Digital deadlines)
If you fail to comply with MTD requirements, you may face financial penalties. Here are some common mistakes to watch out for:
Missing quarterly submission deadlines. Forgetting to file on time is one of the most common causes of penalties. Set automated reminders in your calendar or accounting software.
Using non-compliant software. You must submit VAT returns and quarterly updates through HMRC-recognised software — not via spreadsheets or the HMRC website.
Copying and pasting data manually. Under MTD rules, figures must flow digitally between systems (via Digital Links). Manually entering or retyping data could put you in breach of the rules.
Mixing business and personal expenses. Keep your business records separate and fully digital to avoid reporting errors.
Delaying digital setup. Waiting until the last minute to switch systems can cause stress, data errors, and missed deadlines.
What penalties apply if you miss a Making Tax Digital deadline?
HMRC now uses a points-based penalty system. Each late submission earns one point, and once you reach your threshold (four points for quarterly submissions), you’ll receive a £200 fine. Points reset after a period of good compliance.
You can learn more about how the new penalty system works in our dedicated guide to Making Tax Digital penalties.
Wrapping up
By now, you hopefully have a clear overview of what Making Tax Digital means for your business in the coming months and years.
To recap, here are the most important Making Tax Digital deadlines and requirements to be aware of:
MTD for VAT is already in effect for all VAT-registered businesses. Returns must be filed digitally every quarter, within one month and seven days of the period end.
MTD for Income Tax Self Assessment (ITSA) will start in April 2026 for sole traders and landlords earning over £50,000, expanding to lower income bands in 2027 and 2028. Quarterly updates will be due on 5 August, 5 November, 5 February, and 5 May.
Digital record-keeping and Digital Links are core requirements. Make sure your software is compliant and data flows automatically between systems.
Annual submissions (the End of Period Statement and Final Declaration) are due by 31 January after the tax year ends.
If you haven’t already, take the time now to set up compatible software, map out your reporting periods, and add all applicable Making Tax Digital deadlines to your calendar.
Aim to be fully prepared before those requirements and deadlines take effect, so you can continue running your business smoothly without last-minute stress.
Preparing for MTD? Tide helps you stay compliant with straightforward, MTD-ready accounting features and tools. Learn more about Tide’s accounting software.
Photo by Artem Maltsev on Unsplash
