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MAKING TAX DIGITAL
Making Tax Digital (MTD) news and updates
Making Tax Digital (MTD) is changing the way businesses report their VAT and Income Tax, making it compulsory to retain digital records and submit via HMRC-approved, MTD-compatible systems.
First announced in 2025, MTD has been introduced on a steady phased rollout. That means it’s important to stay current with any MTD news that could impact you and your business.
Read on and get caught up with MTD news and updates with QuickBooks.
Making Tax Digital news and updates – In summary
Making Tax Digital for Income Tax is underway as of April 6, 2026-27, applying to sole traders and landlords with a qualifying income tax of over £50,000 in the tax year 2024-25. Those with qualifying income over £30,000 (in the tax year 2025-26) and £20,000 (in the tax year 2026-27) are set to join in 2027-28, and 2028-29 respectively
Due to a phased MTD for IT introduction, there are no penalty points for late quarterly update submissions being applied for the 2026-27 tax year. From 2028-29 onwards, penalty points will apply.
MTD for Corporation Tax has been scrapped with no plans on the cards to reintroduce the scheme.
Latest updates on Making Tax Digital for Income Tax (MTD for IT)
Changes are coming to the world of Making Tax Digital for Income Tax. It’s important to stay in the loop, so you can remain aware of anything MTD-related that might impact you.
Thresholds and Start Dates:
As of April 6th, 2026, Making Tax Digital for Income Tax (MTD for IT) is now live for sole traders and landlords with a qualifying income of over £50,000in the tax year 2024-25 . If you fit that category, you’ll need to follow MTD for IT rules from that date.
As part of the phased rollout of MTD for IT, sole traders and landlords with qualifying income over £30,000 in the tax year 2025-26 will also be subject to MTD for IT from the 6th of April 2027.
This continues into April 6, 2028, where the qualifying income limit will drop to over £20,000 in the tax year 2026-27.
Note that “qualifying income” refers to gross income from self-employment and/or property letting, so you must consider both income streams combined.
Learn more about MTD thresholds.
Requirements
Making Tax Digital for Income Tax mandates that you need to retain digital records of your income and expenses. In addition, MTD for IT requires you to send quarterly updates to HMRC using HMRC-recognised, MTD-compatible software, alongside an annual final declaration after the fourth quarterly update.
Penalties
MTD for IT 2026-27 is a “soft launch”, which means that penalty points for late filing your quarterly tax updates will not apply.
After this period, penalty points will apply every time you miss a deadline. Two penalties within 24 months will result in a £200 fine.
From inception, late MTD payments will have an interest rate of 7.75% added to the total cost.
Learn more about MTD penalties.
Latest updates on Making Tax Digital for VAT (MTD for VAT)
Making Tax Digital for VAT (MTD for VAT) may not be as recent as Making Tax Digital for Income Tax, but it’s still worth remaining up to date with it — especially if you’re new to MTD for VAT yourself.
Status: Since April 2022, MTD for VAT has been mandatory for all VAT-registered businesses, regardless of turnover. Learn more about MTD for VAT.
Requirements: As part of MTD for VAT, businesses must retain digital records of VAT-related transactions. They must also use HMRC-recognised, MTD-compatible software, and submissions must be handled with this software.
Digital Links: All systems used to record and submit VAT should be digitally linked to ensure there’s a consistent, unbroken digital audit trail.
MTD FOR INCOME TAX
HMRC-compliant MTD Software
Keep digital records, submit quarterly updates to HMRC, and finalise your Income Tax at the end of your accounting period with Intuit QuickBooks.
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Latest updates on Making Tax Digital for Partnerships
There are some changes to the introduction of MTD for Partnerships worth knowing about.
Status: Partnerships are being indefinitely deferred from Making Tax Digital for Income Tax. There will be no mandation date (the legally mandated date an eligible entity must comply with MTD) for general partnerships, limited liability partnerships (LLPs), or limited partnerships (LPs).
Individual Partners: If an individual partner has a qualifying income as a sole trader or landlord separate from their partnership income, they may still need to comply with MTD for IT. Partnership income does not count toward an individual partner’s qualifying income for reporting MTD.
Preparation: Adopting digital record keeping is good practice for future readiness should this change and comes with many benefits outside of remaining compliant with MTD.
Learn more about MTD for partnerships.
Latest updates on Making Tax Digital for Corporation Tax
Since the initial announcement, there have been major changes to MTD for Corporation Tax.
Status: As of July 2025, HMRC has officially scrapped plans for mandatory MTD for Corporation Tax.
Implication: Because MTD for Corporation Tax has been scrapped, it means limited companies won’t need to adhere to record-keeping or quarterly reporting for their corporation tax returns (CT600) under an MTD scheme.
Note: The cancellation of MTD for Corporation Tax does not affect MTD for VAT or Making Tax Digital for Income Tax obligations, assuming a limited company also has VAT-registered activities, or its directors have qualifying income as a sole trader or landlord.
Learn more about MTD for Corporation Tax.
How to stay prepared for Making Tax Digital
For many people, Making Tax Digital may feel as though it’s looming. To stay prepared for Making Tax Digital, it could be worth moving to accounting software now and proactively retaining digital records. This could remove some burden when the time comes to switch.
If you’re planning on making the switch, ensure you’re using HMRC-recognised, MTD-compatible software, such as QuickBooks. This software isn’t just helpful, it’s required by MTD, both functionally and as a rule.
Discover QuickBooks for Making Tax Digital
Making Tax Digital news and updates FAQs
When does Making Tax Digital for Income Tax apply to those with qualifying income over £30,000?
As of April 6, 2027, Making Tax Digital for Income Tax will apply to sole traders and landlords with a qualifying income of over £30,000 in the tax year 2025-26. From that point, those affected will need to retain digital records, submit quarterly updates, and provide a final declaration via HMRC-recognised, MTD-compatible software.
What are the latest penalty rules for Making Tax Digital for Income Tax?
For the tax year 2026-27, there will be no penalty points for late quarterly updates due to a “soft launch” of MTD for IT. From April 6, 2027-28 onwards, MTD for IT will use a points-based system in which two missed deadlines in 24 months will result in a £200 fine. Late payments incur interest, and additional fines can mount after the initial one.
Does MTD currently apply to all businesses?
No, MTD does not currently apply to every business. Any VAT-registered businesses are subject to Making Tax Digital for VAT. Making Tax Digital for Income Tax applies to sole traders and landlords with qualifying income above certain thresholds. For the 2026-27 tax year, that’s over £50,000, reducing to £30,000, then £20,000 for each subsequent tax year. It does not currently apply to Corporation Tax or Partnerships.
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