What is Making Tax Digital?

Who Needs to Use MTD?

MTD for Income Tax (sometimes called MTD for ITSA) is being rolled out in phases based on your qualifying income — your gross self-employment income, plus property income where relevant, before expenses.

• April 2026 — if your qualifying income is £50,000 or more, you must use MTD
• April 2027 — the threshold drops to £30,000

If your income is below the current threshold, MTD is not yet mandatory for you — but you can still use compatible software voluntarily.

What Are Quarterly Updates?

Under MTD, you send four updates to HMRC each year, summarising your income and expenses for that quarter. These are not tax payments — they are information submissions so HMRC has a running picture of your finances.

Each update covers a three-month period within the tax year (6 April to 5 April).

What is a Final Declaration?

After the tax year ends, there is still a Final Declaration step. It replaces the traditional annual tax return (SA100) for MTD users. It confirms your total income, expenses, and any adjustments, and calculates your final tax liability for the year.

In Vecti's product model, that year-end step is accountant-led rather than a normal self-serve user action.

Key Deadlines

For the 2026/27 tax year, the quarterly update deadlines are:

• Quarter 1 (6 Apr – 5 Jul) — due by 5 August
• Quarter 2 (6 Jul – 5 Oct) — due by 5 November
• Quarter 3 (6 Oct – 5 Jan) — due by 5 February
• Quarter 4 (6 Jan – 5 Apr) — due by 5 May

The Final Declaration is due by 31 January following the end of the tax year.

What Software Do I Need?

HMRC requires you to use software that is recognised as compatible with Making Tax Digital for Income Tax. The software must be able to:

• Keep digital records of your income and expenses
• Submit quarterly updates directly to HMRC
• Support the year-end Final Declaration workflow

Vecti is designed to cover the ongoing record-keeping and quarterly submission side of MTD, with accountant-led year-end support through the platform.

What About My Accountant?

Having an accountant does not exempt you from MTD. However, your accountant can help in several ways:

• Review your quarterly data before you submit
• Submit your Final Declaration on your behalf through Vecti using agent authorisation
• Advise on tax planning, allowable expenses, and CIS deductions

With Vecti, you can connect your account to your accountant so they have read-only access to your records and can handle the year-end submission step when needed.

How Vecti Helps

Vecti is built from the ground up for Making Tax Digital:

• Track income, expenses, and mileage throughout the year
• Submit quarterly updates to HMRC where the submission feature is enabled in your version of Vecti
• See your estimated tax liability in real time
• Connect with an accountant who can review and submit your Final Declaration
• Stay on top of deadlines with built-in reminders