Making Tax Digital for Income Tax for Individuals Full Checklist

2. Work out your qualifying income
☐ Include self-employment income (gross, before expenses).
☐ Include property income (your share if jointly owned).
☐ Exclude:
    o Employment (PAYE) income.
    o Partnership income (unless disguised investment management fees apply).
    o Dividends and savings interest.
    o Qualifying care relief, basis period transition profits, trust income, etc.
☐ Apply UK tax residence rules when including/excluding foreign income.

3. Check your start date
☐ If qualifying income > £50,000 based on 2024–2025 tax return → Start MTD from 6 April 2026.
☐ If qualifying income > £30,000 based on 2025–2026 tax return → Start MTD from 6 April 2027.
☐ Await HMRC confirmation letter after submitting your return.

4. Prepare your compatible software
☐ Select software that:
    o Creates, stores, and corrects digital records.
    o Sends quarterly updates.
    o Submits your final tax return.
    o Supports all relevant income sources (self-employment, UK property, foreign property).
☐ If using spreadsheets, ensure you have bridging software.
☐ If your accounting period is 1 April–31 March, confirm the software supports calendar update periods.

5. Sign up for Making Tax Digital for Income Tax
☐ Ensure:
    o Up-to-date personal details with HMRC.
    o UK resident status.
    o National Insurance number.
    o No outstanding tax liabilities.
☐ Collect required information:
    o Business name, start date, address, and type.
    o Accounting method (cash or traditional).
    o Accounting period (standard or calendar).
☐ Use your HMRC online services account or let your agent sign you up.

6. Create and maintain digital records
☐ Create digital records of:
    o Self-employment income and expenses.
    o Property rental income and expenses.
☐ Keep original invoices, receipts, and documents (digitally or physically).
☐ If using bridging software, ensure digital links are maintained (no copy-paste).

7. Send quarterly updates
☐ Prepare quarterly updates covering:
    o 6 April–5 July (Deadline: 7 August)
    o 6 April–5 October (Deadline: 7 November)
    o 6 April–5 January (Deadline: 7 February)
    o 6 April–5 April (Deadline: 7 May)
☐ Alternatively, opt for calendar periods (1 April–30 June, etc.).
☐ Send even if no income/expenses (“nil returns”).

8. Adjust your business income at year-end
☐ After sending your 4th quarterly update:
    o Apply tax adjustments (e.g., disallowable expenses).
    o Apply accounting adjustments (e.g., accruals, prepayments).
    o Adjust for 1–5 April income if using calendar periods.
    o Claim reliefs and allowances (e.g., capital allowances, Rent a Room relief).

9. Finalise your Income Tax position
☐ Add other income sources (dividends, savings, employment) into your software.
☐ Submit your full Self-Assessment tax return via compatible software.
☐ Submit by 31 January following the end of the tax year.
☐ Confirm the information is accurate and complete.

10. Stay compliant with record-keeping and payments
☐ Keep digital records for at least 5 years after 31 January deadline.
☐ Pay Self-Assessment tax bill on time to avoid penalties.
☐ Manage any changes:
    o Add or cease income sources via HMRC online account.
    o Adjust payments on account if needed.
    o Amend returns via HMRC or through contacting support.

⭐ Other Situations to Monitor
• If you start a new business after signing up → Include it from next Self-Assessment year.
• If you jointly let properties → Choose whether to submit full or simplified expenses in quarterly updates.
• If your turnover crosses £90,000 → Apply full digital categorisation requirements.