Free tool
What do you need for MTD for Income Tax?
Based on GOV.UK guidance on MTD for Income Tax and its penalties.
What MTD for Income Tax involves
- Keep digital records of your self-employment and property income and expenses, in software or a spreadsheet linked to software.
- Send quarterly updates from software for each income source: by 7 August, 7 November, 7 February and 7 May.
- File your tax return and pay any tax by 31 January after the end of the tax year.
For when it starts for you, see the MTD for Income Tax start date checker.
The new penalties
| Penalty | How it works |
|---|---|
| Late submission | A point for each missed quarterly update or tax return deadline. At 4 points, a £200 penalty, and £200 for each further missed deadline. No penalties for missed quarterly updates in the 2026 to 2027 tax year |
| Late payment, 2026 to 2027 | Nothing within 15 days. 3% of tax owed at day 15, then 3% more at day 30 and 10% a year from day 31. No penalty for paying 16 to 30 days late in your first year |
| Late payment, 2027 to 2028 | The same pattern at 4% at day 15 and 4% at day 30, plus 10% a year from day 31 |
Who does not need to use it yet
- Sole traders and landlords whose qualifying income is not over the threshold for the year.
- Partnerships and limited companies, which are not currently included.
- People who are exempt or get an exemption, for example if they cannot use computers or the internet.
How it fits with VAT
- MTD for Income Tax is separate from MTD for VAT. Your VAT return, its nine boxes and its dates do not change.
- If you are VAT registered, you keep filing VAT returns through MTD VAT software and send Income Tax updates through Income Tax software. One product can do both, or you can use two.
- One set of records can feed both, as long as VAT is kept in its own columns.
Swift VAT Pro files VAT returns. It does not send Income Tax updates, so you will need Income Tax software from HMRC's list as well.
Your VAT return does not change. File it from £5 a month
Swift VAT Pro files your VAT return from your spreadsheet. Use Income Tax software from HMRC's list for your quarterly updates.
- Connect to HMRC on HMRC's own page with your Government Gateway sign-in. We never see that password.
- See your VAT periods, due dates, amounts owed and payments, read from HMRC.
- Upload your nine box totals as a CSV. Box 3 and Box 5 are worked out and every box is checked.
- Submit and keep HMRC's receipt. Reminder emails arrive before each due date.
No card needed · From £5 a month · Plans for up to 100 businesses · Filing through HMRC's MTD service since 2019
Final thoughts
MTD for Income Tax means digital records, four quarterly updates and a tax return each year. Check when it starts for you, choose software for it, and keep your VAT returns going through MTD as before.
Disclaimer: This guide gives general information, not advice for your business. If you are unsure how the rules apply to you, speak to an accountant or contact HMRC.
Frequently asked questions
Checked against GOV.UK guidance on when to use MTD for Income Tax, penalties for MTD for Income Tax, and using MTD for Income Tax. November 2026.
What is Making Tax Digital for Income Tax?
When are MTD for Income Tax quarterly updates due?
What are the penalties for MTD for Income Tax?
Does MTD for Income Tax apply to limited companies?
Does MTD for Income Tax change my VAT return?
Your VAT return does not change. File it from £5 a month.
Swift VAT Pro files your return to HMRC from the spreadsheet you already keep. From £5 a month.
No card needed · 2,900+ VAT returns filed since 2019