Making Tax Digital (MTD)
Making Tax Digital (MTD) is the government’s initiative to implement a fully digital tax system in the UK, where taxpayers keep digital records and use MTD-compatible software or ‘bridges’ to make tax submissions electronically.
The tax calendar will change with a new requirement to submit quarterly income/expense updates directly to HMRC, with a final Annual Declaration sent electronically, replacing the current annual Self Assessment Tax Return.
What this means for self employed individuals
Each quarter will be set by HMRC, and our system is ready to report on the new calendar periods. This table shows the reporting deadlines for each period.
| Period covered | Filing deadline | |
| Quarterly update 1 | 1 April to 30 June | 7 August |
| Quarterly update 2 | 1 April to 30 September | 7 November |
| Quarterly update 3 | 1 April to 31 December | 7 February |
| Quarterly update 4 | 1 April to 31 March | 7 May |
MalgraBooks has been supporting self employed individuals since 2013, and with the new reporting structures coming into place, we’re ready to help support our members with these new changes.
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Frequently asked questions.
We’ve provided some frequently asked questions, but if you cannot find yours, get in touch with our team.
General Questions
General scheme questions and how MTD may affect you
Making Tax Digital (MTD) for Income Tax Self Assessment (ITSA) begins from April 2026. The two income thresholds are:
Those with qualifying income of more than £50,000 will be mandated into MTD for ITSA from April 2026.
Those with qualifying income of between £30,000 and up to £50,000 will be mandated from April 2027.
Qualifying income is any monies received before expenses are taken away, otherwise known as Turnover. This is usually box 15 (SA103F) or box 9 (SA103S).
No, this is mandatory if you meet the income thresholds
HMRC’s new Making Tax Digital service brings in a new system of issuing ‘penalty points’ when a submission is late. Just like speeding fines, the points based system relates to the individual (or business if a limited company) and after so many points, financial penalties apply.
When submitted on time, no penalty points are applied – however if late, you’ll receive one point. After four points are reached, a penalty of £200 is charged.
Where your business starts during the year, HMRC will annualise the turnover data provided, grossing it up to provide an annual amount.
For example, if you begin self employment in October, and your quarterly data for October/November/December is £8,000, HMRC will annualise this to £32,000 to assume that it would be the total income for the year.
Once you’re mandated to be a part of MTD, you cannot be exempt from reporting until your income falls below the threshold for 3 consecutive tax years.
How does it work?
Details of the MalgraBooks MTD service
All packages are eligible for MTD, however is available as an ‘add on’ for our Essentials package.
You can view the deadlines using the table above. We recommend that you update your accounts monthly, and then confirm the details are ready for reporting using our online tool. This will verify the figures and submit direct to HMRC electronically.
If this is active on your account, our team will send quarterly updates and your annual declaration directly to HMRC
