Quick answers to the questions we hear most often. Each answer links to the relevant guide for the full picture.
The basics
Is MTD actually happening, or will it be delayed again?
Yes, it's happening. The £50,000 threshold start date of 6 April 2026 is in force and HMRC has been testing systems with volunteers since April 2024. The phased thresholds for April 2027 (£30k) and April 2028 (£20k) are also legislated. See What is Making Tax Digital?.
Do I have to do anything right now?
If your qualifying income on your 2024-25 Self Assessment return was over £50,000, yes, you're in MTD from 6 April 2026 and should start choosing software and getting used to it. Otherwise, keep filing Self Assessment as normal and watch the thresholds. See Am I affected, and when?.
I just got an HMRC letter about MTD. Is it genuine?
Almost certainly. HMRC has been writing to people whose 2024-25 figures put them above the £50k threshold. The letter tells you that you'll need to use MTD from April 2026. Cross-check by logging into your HMRC account directly (don't click links in the letter or any email); genuine letters won't ask for passwords or payments.
Will MTD cost me more tax?
No. MTD changes how you report, not what you pay. Your tax bill is calculated from the same rules and allowances as before.
Will MTD save me time?
Probably, eventually. In year one you'll spend a little more time setting up; once the habit is embedded (weekly reconciliation, bank feeds, receipt capture), most people end up with less annual tax-return panic than before.
Income and thresholds
What income counts towards the £50k/£30k/£20k threshold?
Your combined gross (pre-expense) sole-trade income and rental income, across all businesses and UK+foreign rentals. It excludes employment income, pensions, savings interest, dividends, and partnership income. See Am I affected, and when?.
My income is just under the threshold. Should I still prepare?
It's worth starting to keep digital records anyway, you'll likely be mandated within one or two years once the lower thresholds kick in. Better to get the habit now than scramble later.
What if my income changes year to year?
HMRC looks at the tax year that ended two years before the MTD year starts. So the April 2026 test uses your 2024-25 return. One off-year above the threshold puts you in MTD; dropping back below doesn't take you out automatically (you can leave MTD if your qualifying income falls below the threshold for three consecutive years).
Does my employment salary count?
No. Employment income (PAYE) is never part of qualifying income for MTD. You'll still report it annually on your final declaration, but it doesn't pull you into MTD on its own.
What about my pension or savings interest?
Neither counts as qualifying income. They're reported on the final declaration like any other income.
Quarters and deadlines
Can I really file late for the first year without penalty?
For quarterly updates in the 2026-27 tax year, yes: HMRC won't issue penalty points. You still have to file, but a late Q1 won't cost you a point. The final declaration and payment are not covered by the quarterly easement. See Penalties.
What if I start trading mid-year?
You only start MTD from the quarter in which your business begins (or from when you first become mandated). Software walks you through this on first sign-up. Earlier quarters don't need blank submissions.
What if I stop trading mid-year?
Tell HMRC through your software; your cessation date becomes part of your record. You'll submit a final quarterly update covering the period up to cessation, then a final declaration as usual.
I missed a deadline. What do I do?
File as soon as you can, even if late, a point or partial penalty is better than ignoring it. If you have a reasonable excuse (illness, bereavement, software or HMRC system failure), contact HMRC and explain. See Fixing mistakes and Penalties.
Does MTD change my 31 January payment deadline?
No. 31 January (balancing payment + first payment on account) and 31 July (second payment on account) are unchanged. See Paying your tax and National Insurance.
Records and software
Do I have to use an accountant?
No. Many sole traders and landlords manage MTD without one. An accountant helps most if you have complex affairs (multiple businesses, capital allowances, losses, foreign property) or if you just want someone to sanity-check the numbers before the final declaration. Your software does the mechanics either way.
Can I still use a spreadsheet?
Yes, with bridging software connecting the spreadsheet to HMRC. The spreadsheet itself isn't "MTD-recognised", but the combination of spreadsheet + approved bridging tool is. See Choosing software.
What if I still keep paper receipts?
Paper receipts are fine as backup, you don't need to scan everything. What HMRC requires is a digital record (date, amount, category, description) in your software. Most modern software does this via bank feeds or receipt-capture apps; you keep the paper as evidence in case of enquiry.
How long do I need to keep records?
At least 5 years from 31 January following the end of the tax year. So records for 2026-27 need to be kept until at least 31 January 2033. See Keeping digital records.
Can I change software mid-year?
Yes. Export your data from the old provider, import to the new one, and continue, new quarterly updates pick up where the old left off (thanks to the cumulative model). Try to switch between quarters rather than mid-quarter.
What if my software goes down?
Software failure is a recognised reasonable excuse for late filing as long as you act in good faith: contact the provider, document the outage, and file as soon as you can. HMRC won't penalise you for their outage or a genuine third-party failure. See Penalties.
Landlords
I have three rental flats. Do I file three sets of updates?
No, all your UK rentals count as one property business. One set of quarterly updates covers the whole UK portfolio. Foreign rentals, if any, are a separate second business. See For landlords.
My spouse and I own a flat together. Who reports it?
Both of you. Each co-owner has their own qualifying-income position (based on your share of the gross rent) and each reports their share separately. There's a simplification letting jointly-owned landlords report only income (not expenses) quarterly, with expenses left to year-end.
What happened to Furnished Holiday Lettings?
The FHL regime ended on 6 April 2025. FHL income is now treated as ordinary property income for all purposes, including MTD.
Is my mortgage interest an expense?
If it's on residential rental property: no, not as an ordinary expense. It gets a 20% tax reducer instead (the Section 24 rules). Your software has a separate bucket for residential finance costs. On commercial/non-residential loans, interest is a normal expense.
What about a new kitchen or boiler?
Usually capital expenditure (not deductible as an expense this year, but relevant when you eventually sell). Like-for-like repairs remain revenue. When in doubt, ask your accountant before categorising, a common place to go wrong. See For landlords.
Sole traders
I have two businesses. How does that work?
Each sole-trade business has its own set of quarterly updates, so two businesses = 8 updates a year (4 per business). Software submits them together at the deadline. The final declaration brings everything together.
What's the £90,000 threshold I keep hearing about?
Below £90k turnover, you can submit consolidated expenses (one total) in your quarterly updates. Above £90k you must categorise. It's also coincidentally the VAT registration threshold, see For sole traders.
Do I pay National Insurance separately?
No. Class 2 and Class 4 NI are calculated as part of your final declaration and paid with your income tax on 31 January.
I bought a new laptop. Where does it go?
Usually as a capital allowance at year-end (typically under the Annual Investment Allowance, which is 100% deductible in the year of purchase for most sole traders). Your software prompts you at year-end rather than in a quarterly update.
I had a loss this year. What happens?
Your figures show the loss; there's no penalty for being in loss. Loss-relief decisions (carry forward, set against other income, carry back) are tax-planning decisions your accountant can advise on. See For sole traders.
Payments and money
How do I know how much tax to save?
Your software includes an in-year calculation based on figures submitted so far. It's an estimate, not binding, but it's the best guide for setting money aside. A simple rule of thumb for many sole traders is 25–30% of profit, but the calculator will be more accurate.
What if I can't pay on 31 January?
Contact HMRC and set up a Time to Pay arrangement. Doing this stops late-payment penalties from accruing (interest still runs). Small balances can be arranged online; larger ones by phone. See Paying your tax and National Insurance.
Do I still have payments on account?
Yes. If your previous year's tax bill (after amounts collected at source) was £1,000 or more, you make payments on account on 31 January and 31 July.
How do I pay?
The same ways as current Self Assessment: bank transfer, direct debit, debit card, and so on, via your HMRC online account. Your payment reference is your UTR followed by the letter K.
Exemptions and special cases
My elderly relative can't use a computer. Can they be exempt?
Likely yes, they can apply for a digital exclusion exemption. See Exemptions if you can't go digital.
I have a disability that makes typing very hard. Can I be exempt?
Apply and explain your specific circumstances. HMRC considers each application on its merits; medical evidence supports the case.
I live somewhere with no internet. What do I do?
Location-based digital exclusion is a recognised ground. Apply with details of your situation (confirmation from your ISP or a local authority statement helps).
I'm a partner in a partnership. Am I in MTD?
Not yet for your partnership share. MTD for Income Tax currently covers sole-trade and property income only. Your partnership share continues to be reported the existing way. If you also have personal sole-trade or property income over the threshold, that pulls you into MTD for those income sources, but not the partnership side.
I run a limited company. Am I in MTD?
Not this MTD. Limited companies file a CT600 corporation tax return. MTD for Corporation Tax is a separate future programme, not yet mandated.
Do I need to do MTD for my VAT?
If you're VAT-registered, you're probably already doing MTD for VAT (mandatory for all VAT-registered businesses since April 2022). It's a separate regime with separate software requirements, though many accounting packages handle both together.
Final declaration and year-end
What's the difference between MTD and Self Assessment?
Self Assessment is the current annual-only return system. MTD replaces it with quarterly updates through the year plus a final declaration at year-end. Same tax, same bill, different rhythm. See The final declaration.
When is the first final declaration due?
For those mandated from April 2026, the first final declaration covers 2026-27 and is due by 31 January 2028. The last quarter of data is due by 7 May 2027.
If I filed four quarterly updates, do I have to redo everything?
No. The final declaration takes your cumulative Q4 figures and adds year-end adjustments (capital allowances, losses, reliefs, pension contributions, etc.). It's not a full re-entry, more like a final top-up of things that only make sense once the year is closed.
Can I amend my final declaration?
Yes. You have 12 months from the 31 January deadline to amend, same as current Self Assessment. Amendments beyond that require an HMRC correction process. See Fixing mistakes.
Using Kite
Does Kite handle all of this?
Yes, bank feeds, digital records, categorisation, quarterly updates, final declaration, in-year estimates, capital-allowance prompts, NI and student-loan calculations, and reasonable-excuse records. The whole point is that the mechanics become invisible so you can focus on running your business.
What if HMRC rejects my submission?
Kite handles the error response, flags the issue, and guides you through a fix. For a correction, the cumulative model means a corrected next quarter replaces the faulty one automatically. See Fixing mistakes.
Does Kite work for accountants acting on behalf of clients?
Yes. Kite supports the HMRC agent authorisation flow so your accountant can work inside your account and submit on your behalf.
Still stuck?
If your question isn't here, tell us, we add to this list as questions come up. And when in doubt, GOV.UK is the authoritative source, linked throughout the guides.
- Glossary for definitions.
- HMRC helpline for person-to-person questions.
Sources
Answers draw on the specific GOV.UK pages cited at the end of each individual guide in this series, plus the main MTD for Income Tax landing pages: