MTD Overview
Making Tax Digital Overview
Section titled “Making Tax Digital Overview”Making Tax Digital (MTD) for Income Tax is HMRC’s programme to modernise the UK tax system. It requires self-employed individuals and landlords to keep digital records and submit quarterly updates to HMRC.
Who needs to use MTD?
Section titled “Who needs to use MTD?”MTD is being rolled out in phases based on your qualifying income (gross income from self-employment plus property, before expenses):
| Start Date | Income Threshold | Affected |
|---|---|---|
| April 2026 | Over £50,000 | ~780,000 people |
| April 2027 | Over £30,000 | ~970,000 additional |
| April 2028 | Over £20,000 | ~900,000 additional |
What counts as qualifying income?
Section titled “What counts as qualifying income?”Included:
- Gross self-employment income (turnover before expenses)
- Gross rental income from UK property
- Gross rental income from overseas property
Not included:
- Employment income (PAYE)
- Dividends
- Pension income
- Savings interest
- Partnership income
If you have multiple income sources, they’re combined. For example, £35,000 self-employment + £20,000 rental = £55,000 qualifying income.
What’s required under MTD?
Section titled “What’s required under MTD?”1. Keep digital records
Section titled “1. Keep digital records”You must keep records of all business transactions digitally. This can be:
- Accounting software
- Spreadsheets (with bridging software like Calceum)
- Apps
Paper records alone are no longer sufficient.
2. Submit quarterly updates
Section titled “2. Submit quarterly updates”Four times a year, you’ll send a summary of your income and expenses to HMRC:
| Quarter | Period | Deadline |
|---|---|---|
| Q1 | 6 Apr - 5 Jul | 7 August |
| Q2 | 6 Apr - 5 Oct | 7 November |
| Q3 | 6 Apr - 5 Jan | 7 February |
| Q4 | 6 Apr - 5 Apr | 7 May |
3. Submit a final declaration
Section titled “3. Submit a final declaration”After the tax year ends, you’ll submit a final declaration by 31 January - the same deadline as current Self Assessment.
What are digital links?
Section titled “What are digital links?”HMRC requires “digital links” - meaning data must flow electronically between systems without manual re-typing or copy-pasting.
Valid digital links:
- Excel formulas pulling data between sheets
- CSV imports
- API connections
- Software integrations
Not valid:
- Copying and pasting values
- Manually re-typing figures
Calceum maintains digital links by reading directly from your spreadsheet and submitting to HMRC via their API.
Penalties
Section titled “Penalties”MTD uses a points-based penalty system:
- 1 point for each late submission
- £200 penalty when you reach 4 points
- Points expire after 24 months of compliance
Exemptions
Section titled “Exemptions”You may be exempt from MTD if:
- Digital exclusion - age, disability, or health conditions prevent digital use
- Religious beliefs - incompatible with electronic record-keeping
- Location - no reasonable internet access available
- Power of Attorney - certain arrangements apply
Contact HMRC on 0300 200 3310 to apply for an exemption.
How Calceum helps
Section titled “How Calceum helps”Calceum is designed specifically for MTD compliance:
- Keep your spreadsheet - No need to learn new software
- Digital links built in - We read your data directly, no copy-pasting
- One-click submission - Upload your spreadsheet, review, and submit
- Deadline tracking - Never miss a quarterly deadline
Join the pilot to get started before MTD becomes mandatory.