How to Complete Your MTD Final Declaration: Step-by-Step for Sole Traders

What This Post Covers

You've filed your four quarterly updates. You've kept your records tidy. Now comes the step that actually closes the tax year: the MTD final declaration. This is the point where you confirm your total income and expenses, add anything that didn't fit into the quarterly updates (such as personal allowances and other income sources), and formally tell HMRC what you owe.

This post walks through the actual mechanics of completing and submitting the final declaration - field by field, screen by screen. It's written for sole traders doing this without an accountant. If you've already read our preparation checklist, this is the next step: actually filing it.

What the MTD Final Declaration Actually Is

Under Making Tax Digital for Income Tax (MTD ITSA), the tax year is made up of two types of submission:

• Quarterly updates - sent four times a year, reporting your income and expenses for each three-month period
• The final declaration - sent once per year, after the tax year ends, to confirm your totals, claim any additional allowances, and calculate your final tax bill

The final declaration replaces the old Self Assessment tax return process for income covered by MTD. It pulls in the figures you've already reported quarterly, lets you review and adjust them, and then asks you to confirm everything is correct. Once submitted, HMRC uses it to calculate what you owe (or what you'll be repaid).

You may also see it called the End of Period Statement (EOPS). These terms are used interchangeably in some HMRC guidance. For practical purposes, they refer to the same year-end submission you make through your MTD software.

The deadline for the final declaration is 31 January following the end of the tax year - the same date as the old tax return deadline. So for the 2026-27 tax year (6 April 2026 to 5 April 2027), your final declaration must be submitted by 31 January 2028.

Before You Open the Final Declaration Form

Completing the final declaration takes around 30 to 60 minutes if your records are in order. If they're not, it will take longer - and you risk submitting incorrect figures. Before you start, make sure you have:

• Your quarterly update totals for all four quarters (income and expenses, broken down by category)
• Bank statements for the full tax year to cross-check totals
• Any income outside your self-employment (employment income, savings interest, dividends, rental income if not already reported)
• Details of any allowances you want to claim (such as the trading allowance or capital allowances)
• Your National Insurance number and Unique Taxpayer Reference (UTR)
• Student loan details if applicable
• Pension contribution records if you're claiming relief

If you've got any of this outstanding, our preparation guide covers what to gather and where to find it.

Step 1 - Log In and Navigate to the Final Declaration

Open your MTD software and log in. In AffordableMTD, the final declaration becomes available after the tax year has ended and all four quarterly updates for that year have been submitted.

Navigate to the relevant tax year on your dashboard. You should see a status indicator showing your quarterly updates as complete and the final declaration as available or pending. Click through to open the final declaration section.

If any of your quarterly updates are still showing as incomplete or unsubmitted, you'll need to resolve those first. You cannot submit a final declaration until all four quarterly updates for that tax year are filed.

Step 2 - Review Your Quarterly Totals

The first screen of the final declaration will show you a summary of the income and expenses reported across your four quarterly updates. These figures have been pulled through automatically from your earlier filings.

Check each line carefully:

• Total gross income from self-employment: Add up what you received across all four quarters. Compare this to your bank statements and invoices for the full year.
• Total allowable expenses by category: Review each expense category (office costs, travel, stock, professional services, and so on). Do the year-end totals look right?

This is your last opportunity to catch errors from your quarterly updates before they are locked into your final declaration. If you spot a significant mistake - such as a quarter's income being wrong - you may need to amend that quarterly update first. Our guide on amending a quarterly update after the deadline explains what's possible at this stage.

Minor rounding differences are normal and nothing to worry about. What you're checking for is anything materially wrong - a missing month of income, an expense claimed twice, or a category that looks implausibly high or low.

Step 3 - Add Any Year-End Adjustments

Quarterly updates capture your day-to-day income and expenses as they happen. But some figures can only be confirmed at year end. The final declaration has a section for year-end adjustments. Here's what you may need to enter:

Capital Allowances

If you bought equipment, tools, or vehicles for your business during the year, you may be able to claim capital allowances rather than deducting the full cost as an expense. The most common relief is the Annual Investment Allowance (AIA), which lets you deduct the full cost of most business equipment in the year you buy it.

You'll need to enter the total amount you're claiming here. If you claimed the cost as an expense in your quarterly updates and you're also claiming AIA, you could be double-counting - make sure you haven't done both.

Basis Period Adjustments

For most sole traders starting after 2024-25, your accounting period matches the tax year (6 April to 5 April). If your accounts run to a different year-end date, there may be overlap or transition adjustments. This is relatively rare for people starting out under MTD but worth checking if your business predates 2024.

Goods Used for Personal Purposes

If you've used business stock or supplies for personal use during the year, HMRC expects you to add the value of those goods back into your income. This field is specifically for sole traders in retail or trades where this applies - for example, a baker who regularly takes products home.

Construction Industry Scheme (CIS) Deductions

If you work in construction and have had tax deducted at source by contractors under CIS, enter your total CIS deductions here. This reduces the tax you'll owe at the end.

Step 4 - Confirm or Claim the Trading Allowance

The trading allowance lets sole traders with very low income (under £1,000 gross from self-employment) pay no tax on that income, without needing to record any expenses. If your gross self-employment income for the year was under £1,000, you may want to claim this instead of deducting actual expenses.

You cannot claim the trading allowance and deduct actual expenses on the same income source. It's one or the other. If your actual expenses are higher than £1,000, claiming actual expenses will give you a bigger deduction.

For more detail on how this works in practice, see our post on the trading allowance for sole traders in MTD.

Step 5 - Enter Other Income Sources

Your quarterly updates only cover your self-employment income. The final declaration is where you declare everything else. You'll need to complete sections for any of the following that apply to you:

Employment Income

If you also worked as an employee during the tax year, enter your employment income and the tax already deducted via PAYE. You'll find this on your P60 (issued by your employer after 5 April each year) or your P45 if you left a job during the year.

Property Income

If you receive rental income from property, you'll declare it here. Enter your total rental income and total allowable property expenses separately. If you've been filing your property income through MTD as well (as a landlord), this may already be populated - check it matches your own records.

Savings and Investment Income

Interest earned on savings accounts goes here. Your bank should send you an annual interest statement. Dividend income from shares is also declared in this section.

Pension Income

If you received pension income during the year, enter the total amount and any tax deducted at source.

You do not need to declare income that's already been taxed at source and is below the relevant threshold (for example, savings interest within your Personal Savings Allowance). If you're unsure what to include, HMRC's guidance on income types is a useful reference.

Step 6 - Claim Personal Allowances and Reliefs

This section is where you claim deductions that reduce your overall tax bill. Most people will only need the basic personal allowance (the amount you can earn tax-free each year - £12,570 for 2025-26 and 2026-27, unless you earn over £100,000). This is applied automatically.

Other reliefs you may need to enter manually include:

• Pension contributions: Payments into a personal pension (not through an employer) may qualify for tax relief. Enter the total contributions you've made.
• Gift Aid donations: If you've made charitable donations under Gift Aid, you can claim tax relief. You'll need the total amount donated.
• Marriage Allowance: If you've transferred part of your personal allowance to a spouse or civil partner (or vice versa), confirm this here.
• Blind Person's Allowance: If applicable, this increases your tax-free amount.

Step 7 - Student Loan Repayments

If you have a student loan and your income is above the repayment threshold, HMRC will calculate your repayment as part of the final declaration. You'll need to confirm which repayment plan you're on (Plan 1, Plan 2, Plan 4, or Postgraduate Loan). If you're not sure which plan applies to you, check your loan documentation or your Student Loans Company account.

Step 8 - Review the Tax Calculation

Once all the sections are complete, your software will generate a tax calculation. This shows:

• Your total income from all sources
• Your total allowable expenses and deductions
• Your taxable profit
• Income tax owed, broken down by band (basic, higher, additional rate)
• National Insurance contributions (Class 2 and Class 4 for self-employed people)
• Any payments on account already made
• The balancing payment due on 31 January

Check this carefully. Common things that look wrong but usually aren't: the tax calculation including Class 4 National Insurance on top of income tax (this is correct - it's a separate charge); payments on account for the following year being included in the amount due (these are advance payments, not errors).

If the figure looks genuinely wrong - for example, much higher than you expected - go back through each section and check that no income has been double-counted and no large expense has been missed.

Step 9 - Make the Declaration and Submit

The final screen asks you to confirm that the information you've provided is correct and complete to the best of your knowledge. Read this carefully. By submitting, you are making a legal declaration to HMRC. Submitting false information - even by mistake - can result in penalties.

Once you're satisfied everything is accurate, click to submit. Your software will send the final declaration directly to HMRC via the MTD API. You should receive a confirmation reference number. Save this - it's your proof of submission.

What Happens After You Submit

HMRC will process your final declaration and update your tax account. Within a few days, you should be able to see your updated tax calculation in your HMRC online account at gov.uk/personal-tax-account.

If you have tax to pay, the balancing payment is due by 31 January. If you overpaid during the year (for example, through payments on account that were too high), HMRC will issue a repayment. This is usually made directly to your bank account if you've provided details, or by cheque.

HMRC may also set new payments on account for the following year, based on this year's bill. These are due in two instalments: 31 January and 31 July. You'll see these calculated in your HMRC account after submission.

You don't need to do anything else once the final declaration is submitted - unless HMRC writes to you with a query. For an idea of what that process looks like, our post on HMRC compliance enquiries is worth reading.

Common Mistakes to Avoid

• Forgetting other income sources: The most common error is only entering self-employment income and missing employment, savings, or rental income. HMRC cross-checks these figures - discrepancies get flagged.
• Claiming expenses in both quarterly updates and year-end adjustments: If you've already claimed a cost as an expense during the year, don't also claim it as a capital allowance in the final declaration. It's one or the other.
• Getting expense categories wrong: Miscategorised expenses in your quarterly updates will carry through to the final declaration. See our post on common MTD expense miscategories to check you haven't made any of the usual errors.
• Missing the 31 January deadline: The final declaration deadline is the same as the old tax return deadline - 31 January. Missing it triggers a £100 penalty straight away, with more to follow. See our MTD penalties guide for the full picture.
• Not keeping records after filing: HMRC can open an enquiry up to 12 months after the filing deadline, and longer in cases of suspected fraud. Keep all your supporting records. Our post on how long to keep MTD records covers the retention rules.

If You Have Mixed Income (Self-Employment and Property)

If you're both a sole trader and a landlord, your final declaration will include sections for both income streams. Each one has its own income, expense, and adjustment fields. Make sure you're claiming expenses against the right income source - costs related to your business go under self-employment, and costs related to your rental property go under property income. These cannot be mixed. Our post on mixed income MTD expenses explains where each type of cost belongs.

A Quick Summary

The MTD final declaration is the last step in the MTD filing cycle. It pulls together your four quarterly updates, adds any year-end adjustments and other income, applies your allowances, and produces a final tax calculation. The process takes under an hour if your records are in order. The key steps are: review your quarterly totals, enter year-end adjustments, declare other income sources, claim your reliefs, check the tax calculation, and submit before 31 January. Keep your confirmation reference and supporting records once it's done.