MTD categories & HMRC guides

1. MTD for Income Tax

Making Tax Digital for Income Tax (MTD ITSA) means keeping digital records and sending quarterly updates to HMRC, then a final declaration.

2. MTD for VAT

VAT-registered businesses must keep digital VAT records and submit VAT Returns using compatible software.

3. MTD Deadlines

MTD adds quarterly update deadlines during the tax year, plus Self Assessment payment and final declaration dates.

4. Business Types

Sole traders, partnerships, and landlords can all be in scope for MTD — rules depend on income and how you trade.

5. Record Keeping

You must keep digital records of income and expenses that support your quarterly updates and tax return.

6. Self-Employed MTD

Self-employed traders above the income threshold must join MTD for Income Tax and report trading income digitally.

7. Landlord MTD

UK property landlords may need MTD for Income Tax when rental income is above the threshold.

8. HMRC Approved Software

You must use functional compatible software that can send MTD updates to HMRC securely.

9. MTD Exemptions

Some people cannot use digital tools and may qualify for an exemption from MTD — most businesses must comply.

10. Penalties & Fines

Late quarterly updates, late final declarations, and late payment can all lead to HMRC penalties.

11. Quarterly Updates

Four updates per year summarise your income and expenses — they are not your final tax calculation.

12. Final Declaration

After the tax year ends you confirm your full income and pay any remaining tax — this replaces the main SA return for MTD users.

13. Income Sources

You may have several income streams — each may need to be recorded separately under MTD.

14. Allowable Expenses

You can deduct allowable business expenses from income — they must be wholly and exclusively for trade.

15. Digital Records

Records must be digital, complete, and preserved — paper alone is not enough for MTD.

16. MTD Sign Up

Sign up for Self Assessment first, then register for MTD for Income Tax when required.

17. HMRC Online Services

Your Government Gateway account lets you view tax, authorise software, and manage HMRC online.

18. Tax Calculations

HMRC calculates tax due based on your updates and final declaration — understand estimates vs final bills.

19. Agent Services

Accountants and tax agents can submit MTD updates on your behalf if you authorise them in HMRC online services.

20. Help & Support

HMRC offers web guidance, webinars, and helplines — get help early if you are unsure.