Making Tax Digital deadlines are now live, and the rules have changed since most guides were written. Making Tax Digital (MTD) is HM Revenue and Customs’ programme requiring digital records and software-based filing. HM Revenue and Customs (HMRC) announced it in 2015. It affects every Value Added Tax (VAT) registered business today. Sole traders and landlords join from April 2026.
If you have not checked your obligations recently, start with HMRC’s authoritative overview: the GOV.UK Making Tax Digital for Income Tax collection, last updated 17 December 2025. This guide covers the corrected timeline, thresholds, software, exemptions, and how to comply.
What Is Making Tax Digital UK?
Making Tax Digital is HMRC’s digital transformation programme. It rests on two pillars. First, keep digital records of income and expenses. Second, submit updates through HMRC-recognised software. HMRC calls it “the biggest change since HMRC launched Self Assessment more than 30 years ago”, per the HMRC Making Tax Digital campaign site. The goal is fewer errors and real-time reporting.
Digital record keeping replaces paper and manual spreadsheets. Software-based filing sends data straight to HMRC. This shifts tax from a once-a-year event to a continuous process. The result is a clearer audit trail and closer real-time visibility of your tax position.
What Is the Making Tax Digital Timeline?
MTD for VAT has applied to all VAT-registered businesses since April 2022. MTD for Income Tax phases in from 6 April 2026. The programme has run in stages since 2015, with the Income Tax rollout delayed more than once. That slippage is why “check your start date” now matters so much.
| Date | Milestone | Source |
|---|---|---|
| 2015 | Making Tax Digital announced | GOV.UK |
| April 2019 | MTD for VAT mandatory for turnover above £85,000 | GOV.UK MTD for VAT |
| 1 April 2021 | Digital links mandatory for VAT (soft-landing period ends) | GOV.UK MTD for VAT |
| 1 April 2022 | MTD for VAT extended to all VAT-registered businesses (about 1.1 million more) | GOV.UK MTD for VAT |
| 6 April 2026 | MTD for Income Tax begins for qualifying income above £50,000 | legislation.gov.uk SI 2026/336 |
| 6 April 2027 | MTD for Income Tax threshold drops to £30,000 | legislation.gov.uk SI 2026/336 |
| 6 April 2028 | MTD for Income Tax threshold drops to £20,000 | legislation.gov.uk SI 2026/336 |
| No confirmed date | MTD for Corporation Tax | HMRC (no mandation date set) |
The Income Tax rollout was floated for 2018, then 2024, then 2026. That history explains reader confusion about the dates.
Who Must Comply With Making Tax Digital for VAT?
Every VAT-registered business must comply, regardless of turnover, since April 2022. VAT registration itself is required once taxable turnover passes £90,000. Voluntary registration below that threshold also pulls you into MTD for VAT. So the turnover figure now sets who registers for VAT, not who follows MTD once registered.
| Threshold | Amount | Effective | Source |
|---|---|---|---|
| VAT registration | £90,000 | 1 April 2024 | GOV.UK VAT registration thresholds |
| VAT deregistration | £88,000 | 1 April 2024 | GOV.UK VAT policy paper |
| Previous registration figure | £85,000 | until 31 March 2024 | GOV.UK VAT policy paper |
The registration threshold rose from £85,000 to £90,000 at Spring Budget 2024, per GOV.UK. Read the current rules in HMRC’s Making Tax Digital for VAT guidance. For the identifiers you need to register, see Commenda’s UK tax ID numbers guide.
Who Must Comply With Making Tax Digital for Income Tax?
Sole traders and landlords with qualifying income above £50,000 must comply from 6 April 2026, per legislation.gov.uk. The threshold drops to £30,000 in 2027 and £20,000 in 2028. Qualifying income is gross income from self-employment plus property, measured before expenses. If you have both, HMRC combines the two figures against the threshold.
| Start date | Qualifying income | Basis tax year | Source |
|---|---|---|---|
| 6 April 2026 | above £50,000 | 2024-25 | GOV.UK eligibility guidance |
| 6 April 2027 | above £30,000 | 2025-26 | GOV.UK eligibility guidance |
| 6 April 2028 | above £20,000 | 2026-27 | legislation.gov.uk SI 2026/336 |
The £20,000 tier is now confirmed law, not a proposal. It was announced at Spring Statement 2025 and enacted through the Income Tax (Digital Obligations) Regulations 2026, per legislation.gov.uk. That brings about 970,000 more taxpayers into scope, per HMRC’s impact note published 24 March 2026. You can also sign up voluntarily below the thresholds.
How Does Making Tax Digital Work for Landlords?
Landlords follow MTD for Income Tax on the same phased thresholds as sole traders. Property income counts toward qualifying income, and HMRC combines it with any self-employment income before testing the threshold. So a landlord above £50,000 in gross property receipts is in scope from 6 April 2026, per legislation.gov.uk. The £30,000 tier starts 2027 and the £20,000 tier 2028.
A landlord in scope must keep digital records of rental income and expenses. You send four quarterly summary updates from your software during the year. Then you submit a final declaration by 31 January. The HMRC campaign site targets landlords directly on these steps.
What Are the Making Tax Digital Exemptions?
HMRC exempts the digitally excluded, those with religious objections, and certain other cases. Digital exclusion covers people who cannot reasonably use digital tools due to age, disability, remoteness, or no reliable internet. Religious grounds cover beliefs incompatible with electronic communication or records. Exemption is not automatic for most people. You must apply to HMRC, and HMRC decides.
While a decision is pending, keep meeting your existing obligations where you can. If you were already exempt from MTD for VAT, you may carry that exemption into MTD for Income Tax, subject to HMRC confirmation. Check the current exemption criteria on GOV.UK before you apply, since HMRC reviews them regularly.
What Counts as Digital Record Keeping Under MTD?
Digital record keeping means storing transaction-level detail in functional compatible software. For each item you record the date, amount, VAT rate where relevant, and a description. VAT records are generally kept for 6 years, per HMRC. The software must maintain records, calculate tax, and file to HMRC through an application programming interface (API). Manual paper ledgers no longer meet the standard.
What is the MTD digital links requirement?
A digital link is an electronic transfer of data between programs with no manual intervention. Copy-paste and re-keying between systems are not allowed. This rule applies to MTD for VAT for periods starting on or after 1 April 2021, per GOV.UK. Linked spreadsheet cells, API transfers, and CSV import or export all qualify. The point is an unbroken audit trail from source data to submission.
How Do Quarterly Updates and the Final Declaration Work?
Under MTD for Income Tax you send four quarterly summary updates from your software during the year. Then you submit a final declaration, your tax return, from the software by 31 January. HMRC describes this as splitting and spreading the admin across the year. The quarterly updates are running summaries of income and expenses. They are not four full tax returns.
The final declaration replaces the old annual Self Assessment return. It reconciles your quarterly figures and adds any reliefs or adjustments. A Commenda compliance calendar helps you track each quarterly deadline and the January cut-off in one place.
How Do You Register for Making Tax Digital for Income Tax?
Follow HMRC’s three steps to get ready. First, check your start date against your qualifying income. Second, choose HMRC-recognised software. Third, sign up on GOV.UK before your start date. HMRC’s campaign site tells the £50,000 cohort they “should already have signed up to MTD”, so that group is live, not upcoming.
Do not leave sign-up to the last minute. An accountant acting as your agent can sign you up on your behalf. HMRC’s eligibility and start-date guidance gives step-by-step routes for sole traders, landlords, and agents.
How Do You File a VAT Return Digitally?
Record every transaction in MTD-compatible software, then submit the return to HMRC through the software’s API connection. Businesses that prefer spreadsheets can use a linked spreadsheet plus bridging software. The old HMRC VAT online form is closed to MTD businesses. The software calculates the VAT, files it, and returns a confirmation from HMRC.
The workflow is simple in practice. Enter sales and expenses, often through automated bank feeds. Let the software calculate the VAT due. Submit through the API. For a full walkthrough, see Commenda’s VAT returns in the UK guide.
What Software Do You Need for Making Tax Digital?
Any software on HMRC’s recognised list works for MTD. There are free and paid options. Bridging software lets you keep spreadsheets while filing compliantly, which HMRC confirms on its campaign site. Full accounting packages and bridging tools both qualify, as long as they connect to HMRC through an API.
Choose on four criteria. Confirm HMRC recognition first. Check integrations with your bank, payroll, and existing systems. Check it scales as you grow. Check the support on offer. HMRC publishes its recognised software lists for both VAT and Income Tax on GOV.UK, so verify any product against the current list before you commit.
Will Making Tax Digital Apply to Corporation Tax?
Not yet. HMRC has set no confirmed mandation date for MTD for Corporation Tax, and it is not expected imminently. The earlier “not before April 2026” floor has now passed with no timetable in its place. Companies should still adopt digital record keeping now, so the eventual switch is routine rather than disruptive.
Preparing early pays off. Clean digital records make today’s filings easier too. UK companies still file the CT600 return each year, so keep that process tight. See Commenda’s CT600 corporation tax guide for what to file today.
What Are the Penalties for Missing MTD Deadlines?
HMRC applies a points-based late submission penalty system plus separate late payment penalties. You collect a point each time you miss a submission deadline. Once points reach a set threshold, a fixed financial penalty applies. Late payment triggers further charges that increase the longer the tax stays unpaid. Confirm the current point thresholds and amounts on GOV.UK before you rely on any figure.
The points model rewards getting back on track. Points can expire after a period of compliant filing, per HMRC. The safest approach is filing every quarterly update and final declaration on time, so no points accrue at all.
How Commenda Helps With Making Tax Digital Compliance
MTD gives you no room for guesswork on UK VAT registration, digital record keeping, and return filing. Commenda delivers certainty that all three are handled. Commenda’s global indirect tax software tracks your VAT obligations, keeps compliant digital records, and files your returns to HMRC. See the workflow on Commenda’s VAT returns in the UK page.
Digital links and clean data flow are central to MTD. Commenda supports 100+ enterprise resource planning (ERP) systems, APIs, and custom integrations, listed on the Commenda integrations page, so your records sync without manual copy-paste. For the wider picture as you grow, read Commenda’s international tax solutions overview.
Book a demo to get a free assessment of your UK VAT and MTD filing obligations at commenda.io/book-a-demo.
