A Quick Reminder: what’s different from the old Self Assessment routine
MTD for IT changes how you report to HMRC throughout the year, and what you’re required to keep your records in.
Who’s in scope, and from when. Mandation is being phased in by income level, based on your qualifying income (total gross self-employment and property income) in the relevant tax year:
- Over £50,000 (2024-25 income) – in scope from 6 April 2026 (now)
- Over £30,000 (2025-26 income) – in scope from 6 April 2027
- Over £20,000 (2026-27 income) – in scope from 6 April 2028
If you’re below £20,000, or your income is from other sources (employment, dividends, pensions), MTD for IT doesn’t apply to that income – it’s specifically aimed at self-employment and property income.
Digital records, kept in real time. Instead of gathering figures once a year for the tax return, records now need to be kept digitally throughout the year using HMRC-recognised software (or bridging software linked to spreadsheets – more on that below).
Four quarterly updates a year. Rather than one annual submission, you now send HMRC a running total of income and expenses four times a year, roughly five weeks after each quarter ends:
- Q1 (6 April – 5 July): due 7 August
- Q2 (6 July – 5 October): due 7 November
- Q3 (6 October – 5 January): due 7 February
- Q4 (6 January – 5 April): due 7 May
These are not tax calculations – no tax is due at this point – just a running update of income and expenses by business/property source.
A final declaration, not an End of Period Statement. After the tax year ends, you still submit a year-end final declaration by 31 January – the same deadline as the current Self Assessment return – confirming total income, claiming reliefs and allowances, and finalising the tax due.
Penalties are changing too. Late quarterly updates and late returns attract points under a new points-based system – one point per missed deadline, with a £200 penalty triggered once you hit four points (and £200 for every subsequent miss). Points expire 24 months after the missed deadline, provided you haven’t crossed the four-point threshold. Late payment penalties are separate and scale with how late payment is: broadly a 30-day grace period in year one (15 days from year two), then escalating charges plus interest. HMRC has confirmed there’s a “soft landing” on quarterly update penalties in the first year, but this doesn’t extend to late payment.
Final Thoughts
MTD for IT is now a live obligation, not a future one, for anyone over the £50,000 threshold. The mechanics are more frequent than the old annual routine, but not more complicated – and the profession’s early experience suggests the software and process concerns are manageable with the right setup. We’re happy to talk through what it means for your specific circumstances.