Making Tax Digital for Income Tax (MTD for IT) extensions

Making Tax Digital for Income Tax (MTD for IT) is a government initiative that is changing the way you report your income. As of the 2026-27 tax year, MTD for IT applies to all sole traders and landlords with a qualifying income of over £50,000 in the tax year 2024-25, dropping to £30,000of income in the tax year 2025-26 as of 2027-28. MTD requires you to send digital quarterly updates to HMRC, along with a final year-end declaration. 

With multiple strict deadlines throughout the year, there could be situations where you might miss an update, and an extension may be necessary. This page will look at when and how you can request an extension for Making Tax Digital for Income Tax.

MTD extensions – in summary

• An MTD extension to submit information is not the same as an extension for the payment deadline – they are two separate deadlines.

• Penalties for missing the deadline are points based. You can get up to four points before you’ll incur a charge.

• There are a few “reasonable excuses” that HMRC may accept for an MTD extension. Bear in mind that each request is looked at on a case-by-case basis.

What are Making Tax Digital for Income Tax extensions?

Under Making Tax Digital for Income Tax (MTD for IT), businesses and landlords are required to maintain digital records, use HMRC-approved, MTD-compatible software, and submit quarterly updates to HMRC. An MTD extension is an agreement from HMRC that gives you more time to submit the required information, such as VAT returns and quarterly Income Tax updates. These are purely an extension for your supporting documents and not an extension for payment. 

When might you need a Making Tax Digital extension?

There are a few reasons why a business might need an MTD extension. Typically, they are unforeseen and unexpected circumstances. 

Below are some of the reasons HMRC might approve an MTD extension:

• Unexpected serious illness: A sudden illness that prevents you from meeting the deadline. You may be bedbound, attending appointments, or be hospitalised. 

• Bereavement: If you experience the death of a close relative or partner.

• Technical issues: Sometimes unforeseen problems with your MTD software can delay you from submitting on time, or you could have poor internet connection. 

• Natural disaster: Sometimes, unexpected events such as flooding or fires can affect your ability to submit information.

• Unforeseen personal circumstances: Other significant life events that genuinely prevent you from meeting the deadline.

How to request a Making Tax Digital extension

Don’t just assume you’re eligible for an MTD extension. You will need to apply and request an extension. It’s very important to be proactive and contact HMRC as soon as you are aware you need an extension. Below are the steps you should take to request a Making Tax Digital extension. 

• Contact HMRC: Contact HMRC at the earliest opportunity and let them know that you won't be able to meet a deadline. 

• Provide a 'reasonable excuse': You'll need to explain the reason why you are unable to meet the deadline and provide any supporting evidence.

• Apply before the deadline: You should be requesting an extension before the deadline. Applying once the deadline has passed can make it harder to be granted, and you may still incur penalties.

• Consider that extensions aren’t guaranteed: Bear in mind that any extensions are not guaranteed and are at HMRC's discretion.

Making Tax Digital for VAT extensions

If you need an extension for your VAT return submission, you must contact HMRC's VAT helpline. Remember that an extension for sending your VAT return does not automatically extend the deadline for paying your VAT. If you’re late paying your VAT, you can incur penalties, and interest may still apply if the payment isn't made on time.

Making Tax Digital for Income Tax extensions

You should contact HMRC if you need an extension for a quarterly update or your final declaration. For the 2026 to 2027 tax year, while you won’t incur penalty points for late filing of quarterly tax updates, it's still good practice to seek an extension if you need one. Getting into a routine and setting a precedent will help for the future, especially as penalties will apply from the 2027 to 2028 tax year onwards. If you get two penalties within two years, you will receive a £200 fine.

As with VAT, an extension for sending your Income Tax information doesn't extend the payment deadline. Late payment penalties and interest (currently 7.75%) will apply to overdue Income Tax.

What’s not a ‘reasonable excuse' for an MTD extension?

While you might think your reason for needing an extension is valid, HMRC might not agree. Below are some excuses that might not be deemed reasonable for an extension. 

• Forgetting the deadline. Simply forgetting the deadline will not be accepted by HMRC. Set a reminder or write the date down to ensure you don’t miss it. You can face a fine if you miss the deadline. QuickBooks can help you set reminders so that you don’t miss important dates.

• Relying on someone who failed to submit on time. It’s your responsibility to submit your details and make the payments. Relying on someone else could mean the submission is late, missing items, or not up to the standard HMRC expects. 

• Lack of funds to pay your Income Tax or VAT. Payment issues and submission issues are separate. They have separate deadlines, so you can contact HMRC for any concerns with making your payments.

• Not knowing how to use your HMRC recognised MTD compatible software. It’s your responsibility to understand how the software works. Be sure to take some time to learn how it works in advance, so you are ready for when the deadline approaches.

Potential consequences of not getting an MTD extension

Getting an extension isn’t always possible, so it’s important to understand the consequences of missing an MTD deadline. Here are some of the penalties you may face, so you can better prepare yourself:

• Late submission penalties: MTD uses a points-based system for both VAT and Income Tax. You’ll get a penalty point for each quarterly update or tax return deadline you miss with a threshold of 4 points. If you reach this, you’ll get a £200 penalty. You’ll then get a £200 penalty for every other missed submission deadline after.

• Late payment penalties: Late VAT and Income Tax payments are not points-based, and the penalty amount depends on how long it takes you to repay the amount. The penalty will be lower the sooner you pay the outstanding balance. 

• Interest: Interest will be added from the first day of the missed payment. 

You should apply for an extension the moment you’re aware you’ll require one. It’s always a good idea to apply for an extension rather than miss the deadline. 

Making Tax Digital extensions FAQs

How far in advance should I request an MTD extension?

You should try to contact HMRC as soon as you know you'll miss a deadline. Ideally, this will be at least several days or weeks before the actual deadline. Requests for extensions aren’t guaranteed, so if they are rejected, you may be able to think of other arrangements to meet the deadline.

Does an extension for MTD submission also extend the payment deadline?

No, an MTD submission extension is separate from an MTD payment extension. Submission extensions are only relevant to the sending of supporting information. An MTD submission extension does not extend the payment deadline. You’ll need to contact HMRC for an extension to the payment deadline if needed.

Can I get an extension if my MTD software has a technical issue?

Yes, you may be able to get an extension if there’s an MTD-software issue genuinely beyond your control that prevents you from sending your information on time. However, you still need to contact HMRC and your software provider. Ensure you retain any evidence of this failure, such as screenshots of any error messages, software provider correspondence, or any relevant logs.

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