We all know that HMRC is introducing a radically new taxation system... but are you confident about the details? Today’s article aims to clear up a common question: when does MTD for Self Assessment start?
If you’d like to know more, read on for the low-down on MTD deadlines. With this comprehensive guide, we explain HMRC’s MTD rollout, key requirements and new regulations, and how you can prepare to comply on time. First, let’s recap the essentials:
What is Making Tax Digital?
Making Tax Digital is part of the UK government’s plan to bring taxation into the modern age. Some of its main aims include:
- Decreasing reliance on manual records
- Avoiding manual errors in tax calculations
- Increasing the frequency of tax reports
- Reducing the “tax gap” (by improving tax revenue efficiency)
MTD affects a range of taxpayers, including both businesses (VAT) and individuals (Self Assessment). Therefore, many sole traders (i.e. the self-employed) may now be wondering: when does MTD for Self Assessment start, and will I be affected?
If you'd like to learn more about MTD, its context, and its potential outcomes, check out our detailed introduction: "Your Guide to Making Tax Digital for Income Tax".
Who Must Comply with MTD for Self Assessment?
Due to its gradual rollout, taxpayers will need to begin compliance at different times. Initially, mandatory MTD compliance will depend on your income.
- In the first stage, all UK-based landlords and self-employed people with income over £50,000 need to comply with MTD for ITSA.
- The second stage of MTD for Self Assessment encompasses all landlords and self-employed people with income over £30,000 per year.
Specifically, HMRC states that these income thresholds refer to “trading and property income chargeable to Income Tax and Class 4 National Insurance contributions”.
It’s important to note that the rollout applies to both landlords and self-employed individuals (sole traders) simultaneously. This is because Self Assessment is the process for declaring and paying Income Tax used by both these types of occupation.
When Does MTD for Self Assessment Start?
Following HMRC’s successful introduction of MTD for VAT, the changeover to MTD for Self Assessment is now underway with deadlines announced for a step-by-step rollout.
The first stage of MTD for Self Assessment (specifically, MTD for ITSA) is slated for April 2026. Accordingly, MTD for Self Assessment will already be in force for many taxpayers in the tax year 2026–2027.
The second date for the MTD for ITSA rollout is April 2027. At this stage, many more taxpayers will be required to comply with the MTD regulations (as mentioned above).
Note that HMRC has also made clear to expect the introduction of MTD for partnerships in the future.
Key Dates and Deadlines for MTD Compliance
MTD for Self Assessment is happening, and compliance is not optional. Since there has been plenty of notice given surrounding the transition, there’s no excuse for failing to comply on time. That being said, it’s easy to get distracted or forget to check the calendar frequently enough!
To help ensure that you’re on track, here’s a handy summary of some key dates:
MTD rollout dates
The following dates correspond to the MTD for Self Assessment rollout for landlords and sole traders:
- April 2026 (for qualifying income over £50,000)
- April 2027 (for qualifying income over £30,000)
Self Assessment deadlines
Once MTD for Self Assessment applies to you, you should expect certain changes to your Self Assessment process. Alongside the annual Self Assessment deadline each January, you should now expect to submit quarterly updates to HMRC.
How to Prepare for MTD Self Assessment
Wherever possible, it is best to prepare for MTD in advance. This will simplify the transition when MTD for Self Assessment starts, greatly reducing stress or pressures on your business. There are certain MTD-related changes which you should be aware of when it comes to Self Assessment:
Digital records
A key part of HMRC’s MTD initiative is the changeover from old-fashioned bookkeeping. With the introduction of MTD, it will no longer be permissible to manage your finances on paper. Instead, it will be a legal requirement to maintain digital records.
When manipulating your financial data, it is also advisable to make use of “digital links” and avoid manual copying wherever plausible. You must also take care to store backups of your financial records: failing to do so could lead to penalties later if HMRC requests to see your data.
In essence, it is your responsibility to make sure that financial data pertaining to your income is stored safely and securely in digital format according to HMRC’s MTD standards. The best way to make sure you comply is to start keeping digital records today.
Quarterly reports
Although we have become accustomed to annual Self Assessment submissions each January, HMRC’s MTD requires additional quarterly updates (“interim cumulative reports”) on your business finances/income. In keeping with the shift to digital formats, these updates will be submitted online.
It’s vital to remember this new addition to tax reporting, and to mark the quarterly dates on your calendar in preparation. Simply forgetting to submit your quarterly updates will not be regarded as a sufficient excuse and could lead to penalties from HMRC.
Compatible software
When MTD for Self Assessment starts, it will usher in a new era of taxation software. This means that you will have to complete your Self Assessment submissions via compatible software (e.g. AbraTax Self Assessment, which plans to be MTD-compatible upon rollout).
A great way to prepare for MTD is to start using Self Assessment software as soon as possible. This way, the transition will be much smoother because you will already be familiar with digital returns.
Penalties for Missing MTD Deadlines
It is a legal requirement for you to report relevant income to HMRC and pay taxes. As such, HMRC has the power to apply penalties to you if you fail to comply. In the pre-MTD for Self Assessment stage, missing a deadline or payment can result in an instant £100 fine (minimum). If you fail to comply within three months, the fine can increase considerably.
Along with the introduction of MTD for Self Assessment, HMRC will be imposing a new penalty points system. Points will accumulate each time a deadline (e.g. the annual Self Assessment return or a quarterly report) is missed. After accruing a certain number of points, fines will be issued.
The new penalty points system will be in force as soon as you are eligible for (and therefore must comply with) MTD for ITSA, as per the descriptions above.
Under exceptional circumstances, it may be possible to request an extension to your Self Assessment deadline to avoid penalties. Read our separate article "How to Extend Your Self Assessment Filing Deadline" if you think this might be relevant to you.
How AbraTax Will Make MTD Easy
AbraTax provides a convenient, affordable (currently free) and HMRC-recognised Self Assessment service. By filing your Self Assessment return with us, you can benefit from automated tax calculations and error-checking, as well as handy step-by-step guidance.
When MTD begins for you, AbraTax plans to be totally MTD-compatible. This means that we’ll keep up to date with HMRC’s regulations and you can trust us to get the job done! By registering with us now, you can get used to our top-notch service. When the time comes for MTD, we think you’ll barely notice the changeover!
With AbraTax, each Self Assessment return is tailored to your unique income and circumstances, including support for HMRC’s supplementary forms. You can also save progress along the way. Simply register for free to get started today.
Conclusion
Today’s article has discussed key points surrounding the start of MTD for Self Assessment. You should now be clearer about what MTD is and who must comply. Most importantly, you are now familiar with key dates for HMRC’s planned MTD for ITSA rollout. This means that you can prepare in advance for the upcoming transition and be ready for compliance with less stress.
One way to achieve this is through AbraTax Self Assessment, our free and user-friendly service. We are committed to being MTD-compatible when the rollout begins, and the changeover for our users should be seamless!
Sign up today and get ready to submit your next Self Assessment with ease.