Save These Dates To Your Calendar: Making Tax Digital For Income Tax

In recent posts, we’ve covered Making Tax Digital (MTD) to prepare you and help you better understand the upcoming changes. We’ve discussed and debunked some common MTD myths as well as walking you through the benefits of digital accounting software and how it can support compliance with the new regulations. It’s important, however, to also consider the full MTD rollout timeline and how it affects your business: whether you are a sole trader, landlord, or larger business. Below, we’ve provided a full timeline of dates to be aware of up to 2028 with Google Calendar links for ease.

 

Key MTD dates & deadlines to be aware of for 2024 – 2027

2024

  • Now: Sign up for MTD voluntarily (optional for those who wish to do so ahead of their deadline)
  • Now: VAT-registered businesses must comply with MTD 
  • 7th November: MTD quarterly reporting deadline for Q2 figures (VAT-registered businesses). Add to Google Calendar. 

 

2025

 

2026

  • 31st January: Self-assessment tax payment due. Add to Google Calendar.
  • 7th February: MTD quarterly reporting deadline for Q3 figures (VAT-registered businesses). Add to Google Calendar.
  • 6th April: New fiscal year start. Add to Google Calendar.
  • 6th April: MTD becomes mandatory based on total annual income from self-employment or property for income of £50,000 or over per year. Add to Google Calendar.
  • 7th May: MTD quarterly reporting deadline for Q4 figures (VAT-registered businesses). Add to Google Calendar.
  • 7th August: MTD quarterly reporting deadline for Q1 figures (this is also the first quarterly update required of the 2026 cohort of MTD-eligible businesses). Add to Google Calendar.
  • 7th November: MTD quarterly reporting deadline for Q2 figures. Add to Google Calendar.

 

2027

 

2028 and beyond:

  • MTD is expected to roll out for earnings less than £30,000 annually, however, this is pending formal review and a date has not been announced by HMRC.

 

Reporting timeline

As you’ll see above, under Making Tax Digital, there are 4 quarterly reporting deadlines required every year. These reports can be scheduled automatically via some accounting software tools to ensure you always meet the deadline and there are variations to how these deadlines may look for your business. 

 

Standard reporting timeline

Please note the reports are cumulative rather than by quarter, meaning that in Q1 you will report your figures for Q1 only, then in Q2 you will report figures for Q1 and Q2, and so on for the remainder of that financial year. 

  • Q1: 6th April – 5th July reports to be filed by 7th August 
  • Q2: 6th April – 5th October cumulative reports to be filed by 7th November
  • Q3: 6th April – 5th January cumulative reports to be filed by 7th February
  • Q4: 6th April – 5th April cumulative annual reports to be filed by 7th May

 

Alternative reporting timeline

Should a business or individual elect to do so, the timeline may be shifted to cover “calendar quarters” so instead of following the fiscal year, a business can use calendar months (please note these reports are also cumulative and the filing deadline is the same as above): 

  • Q1: 1st April – 30th June reports to be filed by 7th August 
  • Q2: 1st April – 30th September cumulative reports to be filed by 7th November
  • Q3: 1st April – 31st December cumulative reports to be filed by 7th February
  • Q4: 1st April – 31st March cumulative annual reports to be filed by 7th May

Find out more about how to set your quarters to the alternative reporting timeline on the Government website.

 

Who needs to comply with MTD?

MTD is currently in effect for all VAT-registered businesses regardless of company size. 

On April 1st 2024, the VAT registration threshold changed from £85,000 to £90,000, and the deregistration threshold changed from £83,000 to £88,000. If your business’ annual (fiscal year) turnover falls within the threshold, you will need to register for VAT and comply with MTD – i.e. ensure you have compliant accounting software that sends your VAT returns to HMRC digitally. 

 

Who is exempt from MTD?

In some, special circumstances, you may be exempt from MTD regulations, though it’s recommended to keep an eye on the Government website in case regulations change. At present, the following circumstances make you exempt from MTD and need to be reported to HMRC to avoid penalties:

  • Your business’ turnover is below the VAT threshold
  • Your business (or you as an individual) is undergoing an insolvency process
  • You are unable to obtain a National Insurance Number 
  • You are a foster carer and receive care income (please note other types of income will still be subject to MTD)
  • You are unable to use digital technology due to age, disability, or location (e.g. lack of digital infrastructure)
  • You hold religious beliefs that prevent the use of electronic systems

Find out more on the Government website or apply for an exception (please note HMRC will have 28 days to review your application).

 

Penalties for non-compliance with MTD

As MTD is a legal requirement, businesses or individuals found not to be compliant will be subject to receiving penalties. So far, we are aware there will be monetary penalties of:

  • Up to £400 for every return that has not been submitted correctly, using MTD-compatible software
  • Between £5-15 per day for every day on which MTD-compliant record-keeping has not been met 

Further penalties may also apply on a case-by-case basis. Contact our team if you are concerned about compliance. 

 

Additional resources

See the following articles from our blog for more information on MTD:

 

Contact MMG Chartered Accountants

Take advantage of cloud accounting best practices and elevate your business to new heights of success with MMG Chartered Accountants by contacting our team at mail@mmgca.co.uk or calling your local branch.