MTD FAQs
Frequently asked questions about MTD for Income Tax.
Use the FAQ page when you need the short answer on what income counts, whether tax returns or payments become quarterly, what software you need, and what happens if you miss deadlines.
The questions people ask most
Short, plain-English answers to the common MTD sticking points.
What income counts towards the MTD threshold?
Only your business income and rental income count towards the MTD threshold. Add up the money you make from self-employment and from renting out property before taking off costs or expenses. If you own a property with someone else, only count your share. Do not include wages from a job, dividends, or pension income.
Do I need to submit tax returns quarterly under MTD?
No. Under MTD, you do not file four full tax returns each year. Instead, you send four quarterly updates with totals for your self-employment or property income and expenses, then complete the year-end tax return / final declaration process through compatible software.
Do I have to pay tax quarterly under MTD?
No. MTD changes how often you report, not the normal timetable for paying Income Tax. Quarterly updates help keep HMRC and your software up to date, but they do not automatically mean quarterly tax payments.
Do I need specific software, and can I still use spreadsheets?
You need software that is compatible with MTD for Income Tax. You can still use spreadsheets as part of your record keeping, but they need to connect to compatible or bridging software that can handle the digital records and submissions to HMRC.
What happens if I do not comply or miss a deadline?
If you miss deadlines, HMRC can apply late submission and late payment penalties. Late submission penalties are points based, and once you reach the threshold you can receive a £200 penalty, with further penalties for additional missed deadlines. HMRC has said that for 2026/27, it will not apply penalty points for late quarterly updates in the first mandatory year, but penalties can still apply for late tax returns and late tax payments.
Can my accountant submit MTD updates for me?
Yes. An authorised accountant or tax agent can act for you, help you choose compatible software, sign up clients where appropriate, and submit through MTD-compatible software on your behalf.
Authoritative sources
These pages are meant to be useful quickly, not to replace HMRC or professional guidance.
Explore the rest of the toolkit
Each page targets a different question people search for around MTD for Income Tax.
Am I affected?Check whether self-employment or property income puts you into MTD, including the jointly owned property branch.DeadlinesSee the next quarterly update, the quarter boundaries, and the final declaration date in one live view.How cumulative reporting worksWalk through one concrete example of a later quarter correcting an earlier mistake.Income categoriesRead the category explainer for self-employment, UK property, foreign property, and the common out-of-scope cases.