Making Tax Digital (MTD) for income tax is mandatory for individuals with self-employment income and/or property income of over £50,000 in total, from April 2026.
MTD for income tax functionality is available in VT Transaction+, VT Cash Book, VT Report and VT MTD for Excel. This enables VT users to submit quarterly updates of income and expenses to HMRC for self-employment and property.
Submit a quarterly update in VT Transaction+
Submit a quarterly update in VT Cash Book+
Submit a quarterly update in VT Report
Submit a quarterly update in VT MTD for Excel
If you are not sure which program to use to submit your quarterly updates, please see Options for submitting quarterly updates in VT.
What is Making Tax Digital for Income Tax?
What is the income threshold for the MTD for Income Tax requirements?
What happens if my income then falls below the threshold?
Are there exemptions from MTD for Income Tax?
How do I sign up to MTD for Income Tax?
Can I use my agent services account for MTD for VAT for MTD for Income Tax?
How do I obtain authorisation from a client for MTD for Income Tax?
Is MTD for Income Tax supported in VT's programs?
Which VT program should I use to submit quarterly updates?
Will i need to install a separate program for MTD for income tax?
Is there an additional cost for MTD income tax?
Can I submit quarterly updates from VT's programs?
Can I submit the year-end final declaration from VT's programs?
Which software can I submit the year-end final declaration from?
Do the quarterly updates and final declaration have to be submitted from the same software?
Does VT need to be linked to my MTD year-end tax filing software?
How will MTD for Income Tax change how I currently operate VT Transaction+/VT Cash Book?
What income tax records must be kept digitally?
What information should the income and expenses records contain?
What categories of income and expenses are required?
Should I use cash basis or accruals basis accounting?
Do I need to submit quarterly updates for each income type?
Can I submit quarterly updates for different income types from the same file?
When is the first quarterly update to HMRC due?
What if my accounting period is not from 6 April?
Can I submit a quarterly update early?
How do I submit a quarterly update?
Which VT program/method do I use to submit a quarterly update?
What if I make a mistake in a quarterly update?
How does MTD link to basis period reform?
Making Tax Digital (MTD) for Income Tax is the requirement for certain sole traders, self-employed individuals and landlords to:
keep certain income tax records digitally (e.g., recording income and expenses transactions in accounting software or a spreadsheet)
submit quarterly totals of your income and expenses transactions (quarterly updates) from MTD compatible software to HMRC
submit a final declaration of taxable income (i.e., a declaration of all income and expenses, allowances and reliefs) at the end of the tax year from MTD compatible software. This is equivalent to submitting a self-assessment tax return.
MTD for Income Tax will affect individuals who:
are registered for Self Assessment
earn income from self-employment or property, or both, over certain annual thresholds
The information on the remainder of this page only applies to such individuals.
HMRC have an online tool for individuals to check if they need to use MTD for income tax.
HMRC have not announced when individuals in a partnership will come under MTD for Income Tax requirements.
If an individual's gross income from both self-employment and property was over £50,000 in the tax year 2024-25, compliance with MTD for Income Tax is required from 6 April 2026.
| Gross income* | Tax year | MTD compliance required from |
| > £50,000 | 2024/25 | 6 April 2026 (2026/27) |
If an individual's gross income from both self-employment and property was over £30,000 in the tax year 2025-26, compliance with MTD for Income Tax is required from 6 April 2027.
| Gross income* | Tax year | MTD compliance required from |
| > £30,000 | 2025/26 | 6 April 2027 (2027/28) |
Thereafter, if an individual's gross income from both self-employment and property exceeds £20,000 in a particular tax year, compliance with MTD for Income Tax is required from the start of the second tax year after that.
For example, if gross income for the tax year 2026-27 is over £20,000:
| Gross income* | Tax year | MTD compliance required from |
| > £20,000 | 2026/27 | 6 April 2028 (2028/29) |
*from self-employment and property
For further details, see HMRC guidance.
If you come under MTD for Income Tax requirements and your income then falls to below the threshold for three consecutive tax years, you are then exempt from MTD for Income Tax until it increases again above the threshold.
Certain individuals subject to MTD for Income Tax can apply for an exemption, see Find out if you can get an exemption from Making Tax Digital for Income Tax.
See Sign up to MTD for Income Tax.
Agents will be required to use an 'Agent services account' to submit MTD income tax returns for clients.
If you already use an agent services account to submit VAT returns for clients, you will use the same account for MTD for Income Tax.
If you are authorised as an agent for clients for self-assessment
If you also have a 'HMRC online services for agents account' (not the same as an agent services account) for self-assessment clients, you can copy the authorisation for any clients who now come under MTD income tax, to your agent services account. You can do this by signing into your agent services account and selecting 'Add existing self assessment authorisations to this account'.
If you are not authorised as an agent for clients for self-assessment
If you are not authorised as an agent for a client for self-assessment, you will need to obtain authorisation from them to act as their agent for MTD for Income Tax through the 'digital handshake process'. You can do this by signing into your agent services account and selecting 'Ask a client to authorise you'.
Yes you can now submit quarterly updates of income and expenses to HMRC directly from the following programs:
VT Transaction+
VT Cash Book
VT Report
VT MTD for Excel
If you already use VT Transaction+/VT Cash Book to do your bookkeeping, you should submit quarterly updates directly from those programs.
If you do your bookkeeping on spreadsheets, or use accounting software that is not MTD compatible, you can use VT Report as bridging software to submit quarterly updates.
VT MTD for Excel performs a similar function to VT Report, although it can only be used for short-form quarterly updates.
If in doubt, please refer to Options for submitting quarterly updates in VT.
No. MTD for income tax features are integrated in the existing VT programs; VT Transaction+, VT Cash Book, VT Report and VT MTD for Excel. All you need to do to activate the features is download and install the latest version of the software from the home page.
There is no additional cost to the annual subscription prices for MTD. Current subscription prices are listed here. MTD for income tax is included in both the VT Transaction+ and VT Accounts subscriptions, except for agent services account functionality, which requires a VT Accounts subscription.
Yes, see above.
No. This will need to be done from MTD software with year-end final declaration functionality.
If you are an accountant, or an individual that uses an accountant, it is probably most practical to submit the final declaration from the tax software currently used to submit the individual's tax return (assuming that the software becomes MTD compliant).
If you submit your own tax returns, you will need to find suitable year-end MTD tax software for your final declaration.
No. The software used to submit the quarterly updates does not have to be the same software used to submit the final declaration.
Users may want to, for example, submit the quarterly updates from their bookkeeping software and submit the final declaration from their tax software.
No. The programs will operate independently from each other so there is not a need to transfer data from VT to your MTD year-end tax software.
This is because the quarterly update figures submitted from VT to HMRC will be retrievable from your HMRC records in your MTD year-end tax software.
Therefore, when doing your final declaration in your MTD year-end tax software, the income and expenses figures will populate directly from your HMRC records of the quarterly updates, which removes the need to transfer income and expenses data from VT to your tax software.
You should not need to change the way you enter income and expenses transactions in VT Transaction+ or VT Cash Book.
Functionally, the only change to these programs in relation to MTD for Income Tax will be the ability to submit cumulative quarterly totals (by category) of the income and expenses transactions to HMRC.
According to HMRC, you only need to keep digital records of your self-employment and property income and expenses.
Keeping records digitally means recording the transactions in a software program. Invoice and receipt documents do not have to be stored digitally; paper documents are acceptable.
Digital records of individual transactions must be kept. Keeping digital records of summary totals only, is not permitted, apart from the following exceptions:
Retail sales: Daily gross takings (DGT) can be recorded as a single transaction.
Share of joint property income: Quarterly income can be recorded as a single transaction, for each income category. Yearly expenses can be recorded as a single transaction, for each expenses category.
For further information, see Making Tax Digital for Income Tax: digital record-keeping notice.
Although not mentioned in HMRC guidance, there is also a potential exception for purchases listed on a supplier statement to be recorded as a summary total rather than the individual invoices. This has been discussed in the ICAEW TAXguide 04/25: Making Tax Digital for income tax – questions from 2025 webinars in the 'Digital record keeping' section.
Digital records for MTD Income Tax should contain individual transactions (or daily gross takings for a retailer, or quarterly income/yearly expenses totals for share of joint property) of income and expenses, which should include the dates and amounts, and be categorised by the required tax categories for the quarterly updates.
The categories are the same as those currently on the self-assessment tax return, and are listed in Making Tax Digital for Income Tax: update notice - GOV.UK
In VT Transaction+ and VT Cash Book, the default income and expenses accounts for a sole trader/self-employment/property business are automatically assigned to the categories in the quarterly update. Any new income and expenses accounts can be easily mapped to the categories.
The figures submitted in a quarterly update are the summary totals of these categories from the start of the tax year to the end of the quarter being reported.
If your income from UK property for the tax year being reported is b
Either are acceptable. You should continue to use the same basis that you prepared your accounts under your last self assessment return (unless you have reason to change it).
Although the default basis is cash basis, accruals basis is also acceptable.
If you prepare your accounts under the accruals basis, you just need to confirm this at the end of the tax year. For self-assessment you would have done this by ticking a box on your tax return. In a similar manner for MTD, you can confirm this at the end of the tax year, either in VT by making a simple setting change, or in your year-end tax filing software.
A digital link is an electronic transfer of data within or between software programs, rather than manual transfer. Examples of manual transfer are re-typing data, and copying and pasting data.
Digital links are required for the MTD Income Tax data in the software program(s) you use for digital record keeping and submitting your quarterly updates.
This means that the figures you submit in your quarterly updates must be linked to the required digital records of income and expenses transactions through one or more digital links.
If you use a standalone accounting software program like VT Transaction+/VT Cash Book to keep your digital records and submit your quarterly updates, digital links are naturally in place within the program.
If you keep the required digital records in one program and submit the quarterly updates from another program (for example, records are kept on a spreadsheet and VT Report is used as bridging software to submit the quarterly updates), you need to ensure that data transferred between the two programs is digitally linked. Acceptable digital links include export/import of data, amongst others listed in the HMRC guidance: Using software for digital record keeping.
Note: If you transfer full required digital records from one program to another, this transfer does not need to be digitally linked, since the digital link requirement can start from wherever there is data containing the required digital records.
You are required to submit four quarterly updates each tax year as follows:
Self employment: for each business you own
UK property: for total UK property income
Foreign property: for each foreign property you own (from the tax year 2026/27)
VT Transaction+/VT Cash Book
In VT Transaction+/VT Cash Book, you can submit quarterly updates for a self-employment business, UK property income and a foreign property from the same file, if you wish.
Alternatively, quarterly updates can be submitted from separate files, although it is usually easier to submit them from the one file.
Furthermore, if you are VAT registered, VAT returns can be submitted from the same file as the quarterly updates.
If you have more than one self-employment business, and/or more than one foreign property, please refer to the topic Multiple Businesses.
VT Report
VT Report supports any combination of quarterly updates and VAT returns from a single file.
The standard quarterly update periods and deadlines are as follows:
| Quarterly update cumulative period - standard | Deadline for submission |
| 6 April 2026 to 5 July 2026 | 5 August 2026 |
| 6 April 2026 to 5 October 2026 | 5 November 2026 |
| 6 April 2026 to 5 January 2027 | 5 February 2027 |
| 6 April 2026 to 5 April 2027 | 5 May 2027 |
You can elect to use calendar quarters and submit income and expenses data from 1 April rather than 6 April. This is done by a making a simple setting change in the software.
The submission deadlines are the same for standard and calendar quarters.
| Quarterly update cumulative period - calendar | Deadline for submission |
| 1 April 2026 to 30 June 2026 | 5 August 2026 |
| 1 April 2026 to 30 September 2026 | 5 November 2026 |
| 1 April 2026 to 31 December 2027 | 5 February 2027 |
| 1 April 2026 to 31 March 2027 | 5 May 2027 |
If you do not expect to have any further transactions to record, you can send an update up to 10 days before the end of the update period.
Instructions on submitting a quarterly update from VT's different programs can be found here:
VT Transaction+ User Guide: Submit a quarterly update
VT Report User Guide: Submit a quarterly update
VT MTD for Excel User Guide: Submit a quarterly update
There are a few different options to submit a quarterly update in order to accommodate different ways of digital record keeping, and simpler reporting requirements for individuals whose turnover is less than £90k.
Please use the following decision tree to determine which method should be used for your particular circumstances: Options for submitting quarterly updates in VT.
If you make a mistake, you should correct the mistake in VT Transaction+/VT Cash Book (to ensure that your digital records are correct) and then either:
resubmit the quarterly update, or
wait to submit the next quarterly update (if it is within the same tax year), which will include the correction, since each quarterly submission is cumulative from the start of the tax year
You should enter the corrections in VT Transaction+/VT Cash Book (to ensure that your digital records are correct) and then either:
re-submit your 4th quarterly update (before doing your final declaration), or
adjust the income and expenses figures in your year-end MTD tax software by the same amounts as the corrections in VT.
It is not mandatory to include accounting adjustments in the quarterly updates. The options are as follows:
You can enter the adjustments to income and expenses in VT Transaction+ before you submit your 4th quarterly update. The adjustments will therefore be reflected in the 4th quarterly update figures submitted, which your year-end tax software will retrieve from HMRC.
You should enter the adjustments to income and expenses in VT Transaction+ (to ensure that your digital records are correct) and then either:
re-submit your 4th quarterly update (before doing your final declaration), or
adjust the income and expenses figures in your year-end MTD tax filing software by the same amounts as the adjustments in VT.
Please see How is Making Tax Digital (MTD) for Income Tax affected by basis period reform?
HMRC: Use Making Tax Digital for Income Tax
ICAEW TAXguide 01/25: MTD income tax
ICAEW TAXguide 04/25: Making Tax Digital for income tax – questions from 2025 webinars
