Making Tax Digital Deadlines

Paola Faben Oliveira

As a business owner in the UK, watch out for Making Tax Digital (MTD) deadlines to avoid penalties. Missing a deadline can have financial consequences on your business. In this article, we discuss the MTD deadlines and inform you of the impact the MTD will have on business owners and self-employed people in the UK.

We will also discuss Wise Business as a great business account for companies with customers and employees in the UK and internationally, with a useful multi-currency account that lets you access 40+ currencies, with low fees and the mid-market exchange rate. Keep reading to learn more about how Wise can help.

💡 Learn more about Wise Business

What is MTD and how does it work?

Just like its name Making Tax Digital (MTD) is taking tax online, where it belongs. It removes the paper trails and error prone manual processes. Businesses and self-employed individuals can now log their records digitally and use smart software to handle tax returns.
Think of MTD-compatible software as your personal tax sidekick. It crunches the numbers, keeps His Majesty's Revenue and Customs (HMRC) happy, and frees up your time to focus on what really matters — like growing your business.

Who Needs to Register for MTD?

MTD is mandatory if you check any of these boxes:

  • You ran a VAT-registered business¹
  • You are a self-employed individual or landlord who earns 50,000 GBP or more annually (from April 2026) or you have qualifying income of over 30,000 from April 2027²

For income tax, MTD kicks in if:

  • You’re registered for self-assessment as an individual.
  • You are self-employed, own property, or both.
  • You earn more than 30,000 GBP per year.

If you're a business or an individual ready to start your digital tax journey, here's everything you need:

  • Set up a Government Gateway account
  • Get an MTD-compatible software
  • Have VAT or ITSA reference number handy
  • You’re good to go if you understand the requirements and are compliant.

Making tax digital deadlines

It’s important to keep track of MTD deadlines to avoid penalties. Here are the dates you need to know:

VAT MTD deadline

Compliance with Making Tax Digital VAT deadlines is crucial for businesses to avoid penalties and ensure their VAT processes align with the latest government regulations. The VAT MTD deadline was first introduced on April 1, 2019 for businesses with a previously suggested taxable turnover of over 85,000 GBP.

In April 2021, digital links became a must for MTD for VAT. What did this look like? This means your data needs to be integrated seamlessly between MTD compatible software.

In April 2022, the government mandated all VAT-registered businesses, regardless of size of turnover, to comply with MTD for VAT (As of 1 April 2024 the VAT threshold is 90,000 GBP).

Now that MTD for VAT is fully operational there’s no more a MTD VAT deadline to adhere to, instead businesses must:

  • Maintain digital records.
  • Submit VAT using MTD-compatible software.

Income tax MTD deadline

The next MTD deadline is April 6, 2026. If you’re a sole trader or have property income with an annual qualifying gross income of over 50,000 GBP, you must comply with Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) before then.

While individuals with qualifying income greater than 30,000 GBP annually will have to comply with the income tax MTD directive in April 2027.

Qualifying income doesn't include other incomes such as salaries from Pay As You Earn (PAYE) jobs, pension income, and dividends from investments. For example, if you earn 40,000 GBP through PAYE employment and 20,000 GBP as property owner, you don’t need to comply and should continue to submit a Self Assessment Tax Return every year.

While if you earn 40,000 GBP as a sole trader, and 20,000 GBP as a landlord, you will need to be in scope from April 2026.² Similar to MTD for VAT, MTD for Income Tax is expected to roll out gradually over several years.

Best software for making tax digital

You need to choose MTD-compatible software to stay compliant. There are different kinds of software on the market and here are some great examples:

Zoho

  • MTD Features: VAT and self-employed compliance
  • Monthly Costs: Free and paid version (Starting from 25 GBP depending on the package)⁵
  • Other Features: Record-keeping, VAT return submission, and VAT payment history tracking

Check our Zoho Expense overview article here

QuickBooks

  • MTD Features: VAT and self-employed compliance
  • Monthly Costs:106 GBP monthly for sole traders and 16 GBP for limited companies⁶
  • Other Features: Record-keeping, bridging software, VAT return submission, viewing submitted VAT returns, and checking VAT owed

Read our complete Quickbooks Review here

Bokio

  • MTD Features: VAT and self-employed compliance
  • Monthly Costs: 24.95 GBP⁷
  • Other Features: Record-keeping, VAT return submission, and checking VAT owed

Sage Business Cloud Accounting

  • MTD Features: VAT and self-employed compliance
  • Monthly Costs: Pricing available on request⁸
  • Other Features: Accessibility features for impaired users, record-keeping, VAT return submission, viewing submitted VAT returns, checking VAT owed, and VAT payment history tracking

For a full list of MTD-compatible software, visit the HMRC directory.

FAQs – MTD deadlines

What happens if I miss an MTD income deadline?

There are penalties for missing the MTD deadline for ITSA depending on the severity and how many times this has happened. Under the penalty system for voluntary participants in MTD for ITSA, penalties will shift to a points-based approach.
How the points system works:

For every missed submission or deadline, HMRC will subtract one point from your account. For each point, you will get a notification.
You will be fined 200 GBP after accruing two points, which is the 'penalty threshold'.

You can avoid late payment penalties by arranging a "Time to Pay" agreement with HMRC within 15 days of the deadline and adhering to its terms. HMRC can waive penalties in cases of special circumstances, such as serious illness or bereavement.

Is it possible to be exempt from MTD?

Yes, you can apply to get exempt from MTD. This can be due to it not being reasonable or practical for you to use computers, software or the internet to comply with rules for Making Tax Digital for VAT.³
This can be due to:

  • age, disability or health condition
  • if you live in a remote area without access to internet
  • if your religious faith object to using computers
  • no access to the internet

These reasons also apply for exemptions for income tax. Exemption cases are considered on a case by case basis.

Can I use a spreadsheet for MTD?

Yes, with the data link stipulation of the MTD you can still use spreadsheets if you add VAT inputs and outputs using formulas to calculate totals. Provided your spreadsheet will log returns to HMRC using an MTD-compatible software.

International finances made easy with Wise Business account

Wise Business can help UK businesses, freelancers and sole traders to manage finances across multiple currencies, with low fees and the mid-market exchange rate.

wise-business-product

Wise Business account connects with Xero, QuickBooks, FreeAgent, FreshBooks and more solutions to help you seamlessly manage your finances across borders.

When you open a Wise Business account, you’ll benefit from all of these useful features:

  • Hold and exchange 40+ currencies;
  • Send payments to 160+ countries for low fees and the mid-market exchange rate - this is a fair exchange rate with no margins or mark-ups added to it;
  • Get local account details to get paid in 8+ currencies like a local;
  • No monthly fees or minimum balance requirements;
  • Debit and expense cards for you and your team, which you can use in 150+ countries;
  • Multi-user access for team members, with ways to control and manage permissions;
  • Pay up to 1,000 people at once with the Wise batch payments feature.

Get started with Wise Business 🚀


A key to being compliant with MTD is using compatible software and being aware of deadlines. Start your MTD research journey with this guide as you try to stay compliant and grow your business.

Sources used in this article

  1. UK Government - making tax digital for vat
  2. UK Government - making tax digital for income tax self assessment for sole traders and landlords
  3. UK Government - apply for an exemption from making tax digital for VAT
  4. Zoho Pricing
  5. Quickbooks - Pricing
  6. Bokio - Pricing
  7. Sage - Pricing

Sources last checked January 29, 2025


*Please see terms of use and product availability for your region or visit Wise fees and pricing for the most up to date pricing and fee information.

This publication is provided for general information purposes and does not constitute legal, tax or other professional advice from Wise Payments Limited or its subsidiaries and its affiliates, and it is not intended as a substitute for obtaining advice from a financial advisor or any other professional.

We make no representations, warranties or guarantees, whether expressed or implied, that the content in the publication is accurate, complete or up to date.

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