MTD for Income Tax changes how people within scope keep records and report income. It does not remove the annual tax return or the need to pay Income Tax. You send quarterly summaries during the year and complete the annual return through compatible software afterwards.

See the end of year Self Assessment report or explore quarterly reports.

What changes under MTD?

• Keep the required business records digitally.
• Use suitable software and appropriate digital links.
• Send cumulative quarterly income and expense summaries.
• Review the final figures and adjustments after the year ends.
• Add other relevant income and complete the annual tax return through compatible software.

Quarterly updates are not four full tax returns. An additional End of Period Statement, often called EOPS in older explanations, is not a separate filing stage in the current process. Focus on HMRC’s current quarterly-update and annual-return guidance.

Who moves to this process?

The test broadly uses combined gross self-employment and property income before expenses. Exemptions and specialist circumstances matter. Read our eligibility guide and use the checker.

What happens if I am outside MTD?

If you are not using MTD, follow the Self Assessment process that applies to you and your tax year. Being outside MTD does not necessarily mean you do not need an annual return. People who join voluntarily need to understand the duties that follow.

Do I still file the previous year’s return?

Yes, where one is required. Someone using MTD for 2026/27 still normally completes the 2025/26 Self Assessment return in the usual way by 31 January 2027. The first mandatory 2026/27 MTD annual return is normally due by 31 January 2028. The quarterly updates do not replace that earlier return.

Do I pay tax four times a year?

MTD does not itself create quarterly tax-payment dates. Balancing payments are normally due on 31 January after the tax year. Payments on account can create separate January and July payments. It is therefore also misleading to promise that everyone still pays only once a year.

Read how to pay Self Assessment and payments on account explained.

A combined-income example

James has £42,000 of qualifying gardening income and £12,000 of qualifying rental income in 2024/25. The total is £54,000. Subject to exemptions and the other rules, he should use MTD from 6 April 2026. His gardening profit after expenses is a separate calculation.

His software needs to cover the relevant businesses and his annual-return circumstances. TaxSnapper’s sole trader records are not being presented as a property reporting system.

What if a quarterly update is late?

There are no penalty points for late quarterly updates for 2026/27, but updates are still required before the annual return can be submitted. Annual-return and payment obligations remain. Later-year points rules and separate payment rules need checking in our MTD penalties guide.

Use the deadline calendar to keep updates and annual returns separate.

Where TaxSnapper fits

TaxSnapper is designed for straightforward UK sole traders to record income and expenses, store receipt photos and export quarterly reports and an end of year Self Assessment report. It does not submit MTD updates or tax returns to HMRC. Check import formats, required digital links and the annual-return coverage of separate submission software or an accountant before relying on any combination of products.

For the full process, use the complete MTD guide. For the information to prepare at year end, read preparing your own tax return.

Sources and further help

Checked 25 October 2026. HMRC eligibility · Quarterly updates · Software choices · Penalties. Guidance for straightforward sole traders; individual circumstances can change the answer.