Correspondence

Edition 3: Ready, Steady, File!

Published 6 January 2026

Welcome back and thank you for your continued support in helping us test Making Tax Digital (MTD) for Income Tax ahead of its launch in April 2026.

We’re delighted to report over 3,000 successful second quarterly submissions, let’s aim to surpass that with the third quarterly update.

This edition of the newsletter includes:

• what’s new in our testing journey
• calendar quarter updates guidance
• agent reminder to sign up clients early
• autumn Budget announcements for MTD
• share your feedback on the tax estimation calculation

Testing highlights

Customer participation

Customer participation highlights include:

• total participants: around 5,000 taxpayers enrolled and 3,000 actively submitting quarterly updates
• representation: 60% represented by agents, 40% unrepresented
• profile:
  • 4,355 with single mandated self-employment
  • 361 with multiple self-employment
  • 1,621 with UK property income
  • 44 with foreign property income
  • end of year testing: all 18 income types will be fully tested

Performance and volume testing

Performance and volume testing highlights include:

• robust stress testing of IT systems completed
• issues for agents, for example, incorrect service accounts, resolved with new guidance and videos which are available at add your client authorisations for Making Tax Digital for Income Tax
• multiple agent functionality proven — main and supporting agents can be appointed
• migration to the new Enterprise Tax Management Platform completed, enabling enhanced pre-population and real time tax visibility
• quarterly updates by third party software successfully tested, including estimated tax calculations
• every interaction that reaches our customer support team is helping us check and refine the guidance we’ll rely on from April — this ensures HMRC is fully prepared and confident to support customers when the changes go live

Next steps

Next steps include:

• continued testing of all quarterly updates, including the fourth update
• robust end of year returns testing for 2024 to 2025 and 2025 to 2026 (due 31 January 2026 and 2027)
• improved guidance for accounting period changes at use Making Tax Digital for Income Tax

Spotlight: calendar quarter updates guidance

We’ve identified that the most common reason for failed quarterly submissions is confusion around calendar quarterly updates. Here’s a quick refresher:

How calendar quarterly elections work

By default, quarterly updates align with the tax year, for example, 6 April to 5 July. If your software has the functionality, you can choose to send quarterly updates that end on the last day of the month. This will make your record keeping simpler if your accounting period ends on 31 March. These are called calendar quarter:

	Period covered	Filing deadline
Quarter 1	1 April to 30 June	7 August
Quarter 2	1 April to 30 September	7 November
Quarter 3	1 April to 31 December	7 February
Quarter 4	1 April to 31 March	7 May

Calendar quarter elections must be made before your first quarterly update and applies for the full tax year.

Find more information on plan for the adjustment you need to make before you submit your tax return in the first year on use Making Tax Digital for Income Tax.

Common pitfalls

Election timing to calendar quarter timing matters complete it before your first update.

Tips to avoid errors:

• confirm your accounting period before electing
• make your election before the first update

For further clarity, contact our customer support team, details are provided at sign-up.

Agent reminder: sign up clients early for April 2026

If your clients have qualifying income over £50,000 in 2024 to 2025, they’ll need to use MTD for Income Tax from 6 April 2026:

• each client must be signed up individually
• avoid last minute rush in March
• once signed up, no further action is needed until after April 2026 when you will need to start keeping digital records

You can sign up at sign up for Making Tax Digital for Income Tax.

Autumn Budget 2025: key MTD announcements

Key MTD announcements from Autumn Budget 2025 include:

• no penalty points for late submission of the first four quarterly updates for customers joining MTD in April 2026 but quarterly updates must still be submitted before the end of year tax return can be submitted
• penalty easement does not apply to the end of year tax return for 2026 to 2027 (due 31 January 2028)
• first year in the new penalty system — 30 days to pay before a late payment penalty
• one year deferral for certain groups (trust & estates income, averaging adjustments, qualifying care relief, non-UK resident entertainers, sportspeople)
• customers under deputyship (Court of Protection) permanently exempt
• legislation in Finance Bill 2025 to 2026 will clarify further details

Guidance will be updated soon to reflect these changes.

Useful Information

• quarter 3 submission deadline — 5 February 2026
• more information can be found at use Making Tax Digital for Income Tax – Send quarterly updates
• no penalties for late submissions of quarterly updates during testing, but timely submissions help build good habits and support service testing

Find out if and when you need to use Making Tax Digital for Income Tax.

Tell us what you think: tax estimation calculation

After each quarterly update, HMRC provides a year to date estimated tax calculation. This is for budgeting purposes only, not a final bill.

We’d love your feedback

Take our short survey (under 10 minutes).

Thank you for being part of the MTD testing team. Your involvement is shaping the future of Making Tax Digital.