When Will I Need to Submit Digital Tax Returns

At Towerstone Accountants we provide specialist personal tax services, for self employed, and individuals across the UK. This article has been written to explain When will I need to submit digital tax returns, in clear practical terms, so you understand how personal tax and Self Assessment rules apply in real situations. Our aim is to help you stay compliant, avoid costly mistakes, and make confident tax decisions.

This is one of the questions I am asked most often at the moment, and understandably so. There has been a lot of noise around Making Tax Digital, shifting dates, pilot schemes, and different rules depending on who you are and how you earn your income. In my experience the confusion does not come from people ignoring the changes, it comes from not knowing which changes actually apply to them and when.

In this article I want to explain clearly when you will need to submit digital tax returns, who is affected first, what counts as a digital return, and how this fits into the wider Making Tax Digital programme. I will also share what I am advising clients to do now so they are not caught out later.

What HMRC means by digital tax returns

When HMRC talks about digital tax returns it is usually referring to Making Tax Digital, often shortened to MTD. This is not one single change, but a programme made up of several parts that are being introduced over time.

Submitting a digital tax return generally means:.

• Keeping your tax records in digital form

• Using HMRC compatible software

• Submitting required updates and returns digitally rather than on paper

It does not simply mean logging into your HMRC account and typing numbers into an online form. That distinction matters, because many people already submit returns online but are not yet within Making Tax Digital.

Making Tax Digital for VAT, already in force

The first major rollout of digital tax returns was for VAT.

If you are VAT registered, you are already within Making Tax Digital for VAT, regardless of turnover. This means:.

• You must keep digital VAT records

• You must submit VAT returns using compatible software

This applies whether you are a sole trader, limited company, or partnership. In practice this has been in place for several years now, and most VAT registered businesses are already compliant.

If you are not VAT registered, this part does not apply to you yet.

Making Tax Digital for Income Tax, the next major change

The biggest upcoming change affects self employed people and landlords, and this is where most questions come from.

Making Tax Digital for Income Tax Self Assessment, often called MTD for ITSA, will replace the current annual Self Assessment system for those who fall within scope.

Under this system you will need to submit digital updates during the year rather than just one return after the year end.

When MTD for Income Tax starts

Based on current HMRC guidance, the start dates are now clear.

You will need to submit digital tax returns under MTD for Income Tax from:.

• April 2026 if your qualifying income is over £50,000

• April 2027 if your qualifying income is over £30,000

Qualifying income means your total gross income from self employment and property combined, not your profit.

If your income is below £30,000, you are not yet required to join MTD for Income Tax, although HMRC has indicated that this may change in the future.

What digital submissions you will actually need to make

One of the biggest misconceptions I hear is that digital tax returns mean paying tax four times a year. That is not correct.

Under MTD for Income Tax you will need to submit:.

• Quarterly updates of income and expenses

• An end of period statement after the tax year

• A final declaration confirming all income

The quarterly updates are summaries, not full tax returns. They do not finalise your tax position and they do not trigger tax payments.

The end of period statement is where accounting adjustments are made, and the final declaration replaces the current Self Assessment return.

From experience I find that once people understand this structure, much of the anxiety drops away.

Does this apply to employed people

If you are only employed and taxed through PAYE, Making Tax Digital for Income Tax does not currently apply to you.

Your tax continues to be handled through PAYE, and you do not need to submit digital tax returns under MTD unless you also have self employed income or rental income that brings you into scope.

This is an important point, as many employees worry unnecessarily about these changes.

What about limited companies

Limited companies are not yet included in Making Tax Digital for Income Tax.

Corporation tax will eventually be brought into the MTD framework, but this is planned for a later phase and no mandatory start date has been confirmed yet.

For now, limited companies continue to file corporation tax returns in the existing way, although most already do so digitally.

What counts as being prepared for digital tax returns

In practical terms being ready usually comes down to record keeping and software.

If you already use accounting software to record income and expenses, you may be much closer than you think. If you rely on paper records or once a year spreadsheets, changes will be needed.

Digital records typically need to include:.

• Dates of income and expenses

• Amounts

• Categories

• Business purpose

From my experience the transition is much easier when it is gradual rather than rushed.

What I am advising clients to do now

Even if you do not need to submit digital tax returns yet, there are sensible steps you can take now.

In practice I am advising people to:.

• Understand their current income level and thresholds

• Review how they keep records

• Move towards digital systems where possible

• Avoid leaving everything until the deadline year

• Ask questions early rather than guessing

You do not need to overhaul everything at once. Small changes made early tend to stick better and cause less stress.

What happens if you miss the start date

Once MTD applies to you, digital submission is not optional. Failing to comply can lead to penalties, particularly once the new points based penalty system applies.

That said, HMRC has been clear that the early focus is on helping people get it right rather than punishing honest mistakes. In my experience those who engage early and make a genuine effort are treated far more favourably than those who ignore the changes.

Key points to takeaway

The question of when you will need to submit digital tax returns depends entirely on how you earn your income and how much you earn. For many people the key dates are April 2026 and April 2027, and that may feel a long way off, but preparation always takes longer than expected.

From experience the people who struggle most are not those with complex finances, but those who delay engaging because it feels unclear or intimidating. Understanding the timeline and taking steady steps now puts you in control, which is exactly where you want to be when digital tax reporting becomes mandatory for you.

You may also find our guidance on How does Making Tax Digital affect self employed people, and What software can I use for Making Tax Digital VAT returns, helpful when reviewing related personal tax questions. For a broader overview of Self Assessment deadlines, reporting, and obligations, you can visit our self assessment guidance hub.