This article was published in 2022 and was updated in March 2025 for relevance and with the latest technical details.

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Although there have been delays to the planned start for Making Tax for Income Tax, the commencement date of April 2026 is fixed in legislation and the public Beta starting in April 2025 provides increased certainty.

In this blog we take a look at some key dates you need to know, including when to send reports and declarations. We discuss the new Making Tax Digital penalty system, and look at dates for other forms of Making Tax Digital too.

The topics covered are:

• Timeline for the introduction of MTD for Income Tax
• Timeline for periodic updates for MTD for Income Tax
• Timeline for basis period reforms
• Timeline for the new MTD penalty point system
• Timeline for the introduction of MTD for Corporation Tax
• Timeline for MTD for VAT
• Who is excluded from MTD for Income Tax?

Timeline for the introduction of MTD for Income Tax

In simple terms, the majority of the work required for Making Tax Digital for Income Tax will happen prior to April 2026, which is when it begins for sole traders and landlords with business and property income over £50,000.

Accountants and bookkeepers will need to ensure all clients are on suitable software and an appropriate service, as well as implementing and testing internal systems before the first cohort is mandated.

Specific dates include:

• April 2025: Accountants can begin authorising Making Tax Digital for Income Tax clients via their Agent Services Account. The public beta begins for a broader range of clients. Accountants are encouraged to participate to ensure they can have time to get used to the new way of working with some live clients before mandation.
• April 2026: Making Tax Digital for Income Tax becomes a legal requirement for those with business and property income over £50,000
• April 2027: Those with qualifying income over £30,000 are brought into scope
• Future date: Those with qualifying income over £20,000 will be brought into scope.

Allowing clients to both register a year before commencing, and for you to be authorised to deal with Making Tax Digital for Income Tax on their behalf, is intended to smooth out the signing-up process, which was much criticised in the roll out of Making Tax Digital VAT.

Partnerships are currently excluded from Making Tax Digital for Income Tax, although this may change in the future.

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Timeline for periodic updates and declarations for MTD for Income Tax

Making Tax Digital for Income Tax requires the submission to HMRC of at least quarterly updates of summary data of business and property income and expenditure.

After the tax year, data on other other income, gains or reliefs will be submitted along with a digital tax return, when the tax will become due and payable by the 31st January following that tax year.

The standard deadlines for submitting the quarterly updates are:

• 7 August: Covering 6 April to 5 July
• 7 November: Covering 6 July to 5 October
• 7 February: Covering 6 October to 5 January
• 7 May: Covering 6 January to 5 April

So in effect there is a window of around one month from the end of the quarter to make the submission.

Timeline for basis period reforms

Prior to Making Tax Digital for Income Tax, accountants needed to assist clients adjust their basis period so that it matches the fiscal year (if it didn't already).

This is known as basis period reform.

The key timeline has been:

• 2022/23: The last year for any existing full basis period.
• 2023/24: The transitional year when businesses had to transition to the new fiscal year.
• 2024/25: All sole traders must now use the fiscal year for their basis period. In other words, businesses will be taxed only for profits earned in that tax year.

It’s worth remembering that basis period reforms were introduced because of Making Tax Digital for Income Tax, but are not directly linked. All unincorporated businesses, including sole traders and partnerships, need to ensure they follow the new basis period rules, even if their income falls below the thresholds for Making Tax Digital for Income Tax.

Timeline for the new MTD penalty point system

Making Tax Digital for Income Tax effectively introduces a new penalty system whereby points are accrued that can lead to financial penalties. It is the same but separate from Making Tax Digital for VAT penalties. In other words, they work the same way but are not directly linked to each other.

Here are the key dates:

• 1 January 2023: The new penalty system came into effect for Making Tax Digital for VAT for accounting periods beginning after the start of January 2023.
• 6 April 2025: The new penalty system comes into effect for Making Tax Digital for Income Tax users who are in the public beta. However, there will be no penalties for late submission during the testing phase.
• 6 April 2026: Penalties will apply to late submission and payments for all those in Making Tax Digital for Income Tax.

Timeline for the introduction of MTD for Corporation Tax

A consultation about Making Tax Digital for Corporation Tax (CT) was completed at the end of 2021. However with delays in launching Making Tax Digital for Income Tax, it is not anticipated that further plans will be released until after the roll out of the second cohort (those over £30,000) in 2027 at the earliest.

Timeline for MTD for VAT

Just in case you need it, here’s how Making Tax Digital for VAT was rolled out:

• April 2019: Making Tax Digital for VAT comes into effect for most businesses over the then £85,000 threshold.
• April 2022: Making Tax Digital for VAT is extended to all VAT-registered businesses, including those below the then £85,000 threshold.
• April 2024: As a note, the VAT threshold increased to £90,000

Who is excluded from MTD for Income Tax?

Making Tax Digital for Income Tax currently does not apply to the following as of the April 2026 and April 2027 introduction dates:

• Partnerships, including Limited Liability Partnerships (LLPs).
• Trusts and estates.
• Trustees of registered pension schemes.
• Non-resident companies.

It should not be assumed that these entities won’t fall under a similar piece of legislation in the future.

It will probably also be possible for businesses to apply to HMRC for an exemption from Making Tax Digital for Income Tax, as with Making Tax Digital for VAT at the present time. This is usually because they are digitally excluded.

HMRC lists the following as reasons for digital exclusion and therefore an application for exemption:

• Personal circumstances such as age, a disability, or remoteness of location.
• An individual’s religious beliefs mean you object to using computers.
• To quote HMRC directly: “Any other reason why it’s not reasonable or practical.”

Conclusion: Preparing your firm and your clients

While 2026 seems a long time away, it will soon come around. There are many things to consider in terms of the changes required for both your firm and your clients, and early planning is recommended.

Key considerations around client segmentation, choosing technology, and helping clients make the transition will help ensure that you are on track and that everyone has time to prepare adequately.