Ftax MTD for IT includes BOTH the Quarterly update form AND the End-of-Year form.
Ftax MTD for IT includes BOTH the Quarterly update form AND the End-of-Year form.
Making Tax Digital changes how the self-employed report to HMRC. If you are VAT-registered it already affects your VAT returns, and from 2026 it affects your income tax too. Here is what applies to you, and how to file it with Ftax.
For a sole trader, MTD can mean two separate things. MTD for VAT, if you are VAT-registered, which has been in place since 2022. And MTD for Income Tax, which is new from April 2026 for higher earners. They are separate obligations with separate deadlines, and you authorise and submit each one separately, so it is worth being clear on each.
If you are VAT-registered, you are already in Making Tax Digital. MTD for VAT has been compulsory for all VAT-registered businesses since April 2022, whatever your turnover. It means keeping digital VAT records and sending each VAT return to HMRC through compatible software rather than the old online form.
You must register for VAT once your taxable turnover passes £90,000 in any rolling 12-month period, though you can register voluntarily below that. Once registered, MTD for VAT applies and your VAT returns are filed digitally, usually every quarter.
Ftax files VAT returns in a fully MTD-compliant way. You can prepare the figures in your own spreadsheet and submit through the Ftax VAT form, or use the Ftax Cashbook, which calculates the VAT report for you and submits it. Ftax has been recognised by HMRC for online tax filing for over 20 years.
This is the newer change and the one catching most sole traders out. It adds four quarterly updates to your existing Self Assessment process. Throughout the year, you send summaries of your income and expenses through compatible software, then still submit your Self Assessment tax return.
A quarterly update is not a tax return or a tax bill. It is a running summary of your income and expenses for the period so far. Your Self Assessment tax return brings together your final figures and any other income, with any tax due normally payable by 31 January. In practice, you spread a little admin across the year instead of facing it all in one January weekend.
MTD for Income Tax is based on your qualifying income: your gross self-employment and property income added together, before expenses. Employment, pension, savings and dividend income does not count.
If you run more than one trade, you send a separate quarterly update for each business, so keeping them cleanly separated in your records pays off. You need to be registered for Self Assessment for MTD to apply.
You cannot opt out if your income is in scope, but some exemptions exist. HMRC may exempt you if it is not reasonably practical for you to use digital tools, for example on grounds of age, disability or location, or for religious reasons, or if you are subject to an insolvency procedure. Exemptions have to be applied for and approved by HMRC.
MTD is not only about the quarterly submission. You also have to keep your records digitally and keep the figures flowing digitally from your records to your submission. Copying numbers by hand from one system into another does not meet the digital-links rule. In practice, recording income and expenses in software or a linked spreadsheet, and letting that feed the update, is what HMRC expects. Keep your records available for the period HMRC requires after the relevant deadline.
The deadlines are fixed and the same for everyone:
| Update | Standard period | Calendar period | Deadline |
|---|---|---|---|
| Quarter 1 | 6 April to 5 July | 1 April to 30 June | 7 August |
| Quarter 2 | 6 July to 5 October | 1 July to 30 September | 7 November |
| Quarter 3 | 6 October to 5 January | 1 October to 31 December | 7 February |
| Quarter 4 | 6 January to 5 April | 1 January to 31 March | 7 May |
| Tax return | The full tax year | The full tax year | 31 January |
Standard periods run on the 6th to the 5th; calendar periods run to month ends, which many sole traders find simpler. Choose your accounting period before submitting your first quarterly update. The deadlines are the same either way.
For the 2026/27 tax year, HMRC has confirmed that there are no penalty points for late quarterly updates. All four still need to be submitted before you can submit your Self Assessment tax return, so it is best not to let them slip. Late tax returns and late payments can still attract penalties. See the latest HMRC guidance on MTD penalties.
Ftax handles both sides of MTD from one account. For income tax, the Ftax MTD for IT product is one credit at £25 plus VAT, covering you for the whole tax year however many times you submit, and it includes the quarterly update forms and end-of-year tax return. If your turnover has not yet passed £10,000, the forms are free to use. For VAT, the Ftax VAT form files your returns MTD-compliantly from your spreadsheet or the Ftax Cashbook.
Yes, but from one account. MTD for VAT and MTD for Income Tax are separate: you authorise each with HMRC separately and submit them separately. Ftax handles both, so you do not need different software for each.
Yes. MTD for Income Tax does not replace your Self Assessment tax return. If you are in scope, you will send quarterly updates during the year and still submit your Self Assessment tax return. Your quarterly updates need to be submitted before you can submit your tax return, with the tax return and any tax due normally due by 31 January.
No. They are summaries of your income and expenses and are not tax returns or tax bills. Your Self Assessment tax return brings together your final figures and other income, and you pay any tax due by 31 January.
Not yet for partnerships, which will be brought in later, and not at all for limited companies, which report through the Corporation Tax return rather than Self Assessment. MTD for Income Tax is for individuals: sole traders and landlords.
Yes, for both VAT and income tax, as long as the data passes digitally into the form rather than being retyped. Export your totals as a CSV and import them into the Ftax form, or record everything in the Ftax Cashbook.
Ftax does not provide accounting, tax, business or legal advice. This guide has been provided for information purposes only. You should consult with your own professional advisors or with HMRC for advice directly relating to your business before taking action in relation to any of the content provided. Ftax Support will only be able to assist you with matters directly concerning the Ftax products and service.
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