I am VAT Registered & Already Using MTD-Compliant Software

What does Making Tax Digital (MTD) mean for me?

From April 2026, HMRC will expand the Making Tax Digital (MTD) regime to include individuals with combined turnover over £50,000 from self-employment, UK rental, or foreign rental income. This applies even if you’re already submitting VAT returns via MTD — Income Tax will now be included in your digital reporting requirements.

As you are already VAT registered and using MTD-compliant software, you are well-placed to transition — but there are still important changes you need to be aware of and action.

What to Expect Between Now and April 2026

Here is a rough timeline of what to expect:

April 2025

HMRC will begin sending letters to individuals within scope of MTD for Income Tax based on their 2023/24 tax returns. If your total turnover from self-employment and/or rental income is over £50,000 (or between £45,000 and £50,000), expect to receive this letter.

Mid-2025 to Early 2026

Although you’re already using MTD-compliant software, this is the time to ensure it is set up correctly to handle quarterly Income Tax submissions and that your bank feeds and records are accurate. We’ll work with you to make any adjustments required.

7 August 2026 and Ongoing

Under MTD for Income Tax, you’ll be required to submit quarterly updates to HMRC for each tax year. Submission deadlines will fall on:

7 August
7 November
7 February
7 May

These will then be followed by a final end-of-year declaration (similar to your current Self-Assessment return), due by 31 January.

Multiple Turnover Streams

If you have more than one qualifying turnover stream (e.g. self-employment and rental income), you will need to submit separate quarterly updates for each — followed by a combined final declaration. This means more frequent reporting and greater attention to accurate record-keeping.

Your Next Steps

We recommend reviewing and ticking off the following actions to stay ahead of MTD changes:

1. Understand Your Reporting Obligations

Familiarise yourself with the quarterly reporting schedule:

7 August
7 November
7 February
7 May

And remember: each turnover stream requires its own return.

2. Book Your Onboarding Review

Schedule a review call with us to:

Confirm your MTD readiness
Adjust your software if needed
Plan your workflow ahead of the April 2026 deadline

3. Understand Opt-Out Rules (if applicable)

Exemptions may be available due to age, religion, or disability, but they must be applied for directly with HMRC. Unfortunately, we cannot do this on your behalf — though we can guide you through the process.

How Exchange Can Help

We’ll make sure your software is fully MTD-ready for Income Tax
We’ll handle the preparation, approval process, and filing of your quarterly updates
We’ll keep you informed of deadlines and help you avoid non-compliance penalties
We’ll offer support and training tailored to your business and reporting needs

The Upside of MTD

Less chasing:

With real-time data access, we’ll spend less time chasing you for records.

Hands-off approach (if you prefer):

We’ll do the heavy lifting and manage submissions on your behalf — with your approval.

The Downside of MTD

Quarterly submissions must be approved:

Just like your annual return, you’ll need to approve each quarterly update before submission

New penalty regime:

Late or missing quarterly updates could incur penalties. We’ll provide updated guidance on this shortly.

Software costs:

MTD-compliant software carries a monthly fee (but this is tax deductible).

Increased workload = increased fees:

MTD means more frequent submissions, resulting in more work on our end and a likely increase in fees. We’re monitoring the guidance from HMRC and will confirm your new pricing structure in due course — which, of course, is also tax deductible.

Book Your Discovery Call

Let’s check your current setup and prepare your business for full MTD compliance — without the stress.