What Does MTD Actually Require? A Plain-English Guide

The question nobody answers properly

If you search "what does MTD require", you get a lot of content about deadlines and expense categories. What you rarely get is a clear answer to the actual question: what does Making Tax Digital actually make you do, and what does it not make you do? This post answers that directly. No fluff, no upselling, just a plain account of what the rules say you must file, what you can ignore, and what happens at the end of the year.

Start here: what MTD for Income Tax actually is

Making Tax Digital for Income Tax (often called MTD for Income Tax or MTD ITSA) is a government system that replaces the old annual tax return process for certain sole traders and landlords. Instead of filing one big return every January, you file shorter updates throughout the year, then complete a final declaration at the end.

That is the whole system. Quarterly updates, then a final declaration. Everything else you have read about - bank feeds, digital receipts, accounting software - is either optional, a feature sold by software companies, or a myth.

If you are unsure whether MTD applies to you at all, check our post on who actually needs to file MTD and the threshold rules.

What MTD actually requires you to file

Four quarterly updates per year

During the tax year, you must file four quarterly updates. Each update covers one quarter of the tax year. The quarters and their deadlines for 2026-27 are:

• 6 April to 5 July - deadline 7 August
• 6 July to 5 October - deadline 7 November
• 6 October to 5 January - deadline 7 February
• 6 January to 5 April - deadline 7 May

For a full list of exact dates, see our MTD quarterly deadlines for 2026-27.

What goes in each quarterly update

Each update contains two things and two things only:

1. Your total income for that quarter
2. Your total expenses for that quarter, grouped into HMRC's categories

That is it. You are reporting summary totals, not itemised lists. HMRC does not see a list of every invoice you raised or every receipt you have. They see a number for income and numbers for each expense category - things like travel, office costs, and professional fees.

You can read more about exactly what goes into each field in our guide to what to include in your MTD quarterly update.

The final declaration at year end

After your fourth quarterly update, you must complete a final declaration. This is the step where you confirm your figures for the whole year, add any income sources not covered by quarterly updates (such as savings interest or employment income), claim any allowances you are entitled to, and confirm that your information is correct.

The final declaration is separate from the quarterly updates. It is roughly equivalent to what the old tax return did, but by the time you reach it, most of the groundwork is already done. The deadline for the final declaration is 31 January, the same as the old tax return deadline.

For a step-by-step guide to the final declaration, see our post on how to complete your MTD final declaration.

What MTD does NOT require

This is arguably more useful to know than what it does require, because there is a lot of confusion about this - some of it spread by software companies keen to sell you features you do not legally need.

MTD does not require you to submit receipts

You do not send receipts to HMRC. Not digital ones, not scanned ones, not photos of paper ones. You must keep records that support the figures you submit, but the records stay with you. HMRC only ever asks to see them if they open a compliance check.

You can keep records however works for you - a folder of paper receipts, a spreadsheet, a folder of photos on your phone. What matters is that the records exist and that they back up the numbers you have reported. See our post on what backup records to keep for your MTD quarterly update for detail on this.

MTD does not require invoicing software

If you already raise invoices using a particular system, carry on. But MTD does not require you to use any specific invoicing tool. You could raise invoices in a word processor, on paper, or not at all if your business does not use invoices. MTD only cares about your income totals, not how you document them.

MTD does not require bank feeds

A bank feed is a feature where your software connects directly to your bank and pulls in transactions automatically. Some software platforms offer this, and it can save time. But it is entirely optional. Nothing in the MTD rules says you must connect your bank account to anything.

You can enter your income and expenses manually, import a spreadsheet, or use whatever method suits you. As long as the figures you submit are accurate, HMRC does not care how you arrived at them.

MTD does not require double-entry bookkeeping

Double-entry bookkeeping is a formal accounting method used by companies and larger businesses. It involves recording every transaction twice - once as a debit and once as a credit. Sole traders and landlords filing MTD do not need to do this. You are simply recording income and expenses. Single-entry records are fine.

MTD does not require you to hire an accountant

There is nothing in the MTD rules that says you must use a professional. If your finances are straightforward - you earn income from self-employment or property, you have some expenses, you have no unusual allowances - you can file MTD yourself using HMRC-recognised software. That is exactly what bridging software is designed for.

If you want to understand the difference between what bridging software and full accounting platforms actually do, our post on MTD bridging software explained covers this clearly.

MTD does not require you to file real-time tax payments quarterly

Your quarterly updates are not payment events. Submitting a quarterly update does not trigger a tax bill or a payment demand. HMRC uses the figures to build a picture of your annual income, but your actual tax liability is not calculated until after the final declaration. Payments on account - the advance payments some people make - operate on a separate schedule and are not changed by MTD itself.

The minimum records you genuinely need

MTD does not specify that you must keep records in any particular format. But HMRC requires you to keep records that substantiate what you have filed. In practice, for each quarter you need:

• A record of income received - the dates, amounts, and sources
• A record of expenses paid - the dates, amounts, and what they were for
• Evidence supporting those figures - receipts, bank statements, invoices received

You must keep these records for at least five years after the 31 January deadline in the relevant tax year. So records for 2026-27 should be kept until at least January 2033.

For detail on how long to keep records and in what form, see our post on how long to keep MTD records after filing.

For practical advice on setting up a simple system that meets these requirements without overcomplicating things, see our guide to setting up a record-keeping system for MTD quarterly updates.

What counts as acceptable records

HMRC accepts digital records and paper records. If you keep paper records, you do not have to digitise them unless you want to. The requirement is that records exist - not that they are held in any particular software.

That said, keeping digital records does make it easier to import figures when it is time to file. A simple spreadsheet with your income in one column and your expenses (by category) in another is genuinely sufficient for many people.

How quarterly updates relate to your final tax bill

It is worth being clear about the relationship between quarterly updates and the tax you actually pay, because this causes a lot of confusion.

Your quarterly updates feed into HMRC's system. After each update, HMRC may show you an estimated tax figure in your online account. This is an estimate only - it is based on the income and expenses you have reported so far, projected across the full year. It is not a final figure and it does not trigger a payment.

After your fourth quarterly update, you complete the final declaration. This is when HMRC calculates your actual tax liability for the year. The final declaration is also where you add anything your quarterly updates did not include - for example, bank interest, dividends, Gift Aid donations, personal allowance adjustments, or capital allowances.

Once the final declaration is submitted and your tax is calculated, you pay it by 31 January. If you make payments on account, those are offset against what you owe.

For more on how quarterly updates compare to what you used to file, see our post on MTD quarterly updates vs self assessment: what is actually required.

Who this applies to

MTD for Income Tax applies from 6 April 2026 to sole traders and landlords with gross income above £50,000. The threshold drops to £30,000 from April 2027. There are ongoing discussions about a lower threshold in the future, but this has not been confirmed in law.

Gross income means the total income from self-employment and property before any expenses are deducted. If you have both self-employment and property income, these are usually added together to assess whether you meet the threshold. See our post on which income counts toward your MTD threshold for the detail on how this works.

If you are below the threshold or you think you might qualify for an exemption, see our post on MTD exemptions and when you can delay.

What a typical MTD process actually looks like for a self-filer

To make this concrete, here is what filing MTD typically looks like for someone doing it themselves without an accountant:

1. During the quarter, keep a record of income received and expenses paid. This can be a spreadsheet, a notes app, or paper records - whatever you will actually maintain.
2. Near the end of the quarter, add up your income and total each expense category.
3. Log into your MTD bridging software, enter or import the totals, check them, and submit to HMRC before the deadline.
4. Repeat for each of the four quarters.
5. After the fourth quarter, complete your final declaration - add any other income, claim allowances, and confirm your figures.
6. Pay any tax owed by 31 January.

That is the full cycle. For most people with straightforward self-employment or rental income, each quarterly update takes an hour or less once you are in the habit of keeping records as you go.

A note on what software must do versus what it often sells you

HMRC requires that quarterly updates are submitted using HMRC-recognised software. You cannot submit them through HMRC's own website directly. The software must be able to send data to HMRC's system in the correct format.

Beyond that, what software does is up to the software provider. Many platforms offer bank feeds, automated categorisation, invoicing, payroll integration, and other features. These can be useful, but they are not required. If your finances are simple, a bridging software that lets you enter or import your figures and submit them to HMRC is all you need.

If you are trying to decide what software fits your situation, our guide to how to choose MTD software walks through the key questions.

Summary

MTD requires four quarterly updates per year, each containing your income and expense totals for that quarter, followed by a final declaration at the end of the year. It does not require receipts to be submitted, bank feeds, invoicing software, double-entry bookkeeping, or an accountant. You need to keep records that support your figures, but the format is flexible. The quarterly updates do not trigger tax payments - your tax bill is calculated once, after the final declaration, and paid by 31 January. If your finances are straightforward, you can do all of this yourself using simple bridging software.