Using Making Tax Digital for Income Tax

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HowKeep to keep digital records using software

You must use compatible software to keep digital records of all your business income and expenses from your self-employment or property business. Find software that is compatible with making tax digital for income tax.expenses.

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• as close to the date of the transaction as possible
• before you submitsend the quarterly update for that period
• no later than the quarterly deadline

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After your compatible software is authorised, you’llyou need to send updates for each income source to us every 3 months. TheseYour software will tell you when and how to send the updates.

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You must submitsend a quarterly updatesupdate within one month of the end of thatthe standard quarterly period. If you do not submitsend it by this deadline, you may haveneed to pay a penalty.

If you do not expect to have any additional transactions to record, you can send an update up to 10 days before the end of a quarterly period. For example, if you’re going on holiday and know that you will not be working for the remainder of the quarterly period.

Use standard quarterly period dates

The standard quarterly periods and deadlines in each tax year are:are given in the following table.

Quarterly period	Quarterly deadline
6 April to 5 July	5 August
6 July to 5 October	5 November
6 October to 5 January	5 February
6 January to 5 April	5 May

Use calendar quarterly period dates

At a later date, you will be givenable theto optionchoose to use calendar quarters.quarters instead of quarters ending on the 5th day of the month. We will tell you how you can do this when it is available.

Calendar quarterly periods and deadlines are:are given in the following table.

Quarterly period	Quarterly deadline
1 April to 30 June	5 August
1 July to 30 September	5 November
1 October to 31 December	5 February
1 January to 31 March	5 May

How

If you notice an error in your digital records

You should update your records as soon as possible if you notice that you:

• made a mistake when creating a previous digital record, such as accidentally duplicating a transaction
• forgot to submitrecord an expense or a sales receipt

This will either be when you send your next quarterly update or when you confirm an end of period statementstatement.

To update your records, you should change, delete or create a record, so the transaction is recorded correctly in the quarterly period in which it took place.

Your software will ask you to re-send the relevant quarterly update. When you have sent it, the new quarterly update will overwrite the previous one.

Finalise your business income

At the end of thea tax year, the information you needhave sent in your quarterly updates will be combined together to finaliseshow your businessincome income.and Forexpenses for the tax year.

You must have sent HMRC quarterly updates for each incomequarterly source,period you’llbefore submityou can confirm an end of period statement.

If Thisyou ishave whenmultiple you:businesses, you need to confirm an end of period statement for each business.

Before confirming the statement, you may need to:

• make any accounting adjustments
• claimmake anytax reliefsadjustments
• confirmclaim reliefs or allowances

These adjustments will amend the data that you have sent through your quarterly updates.

When you confirm an end of period statement, you will be declaring that:

• the information you’veyou senthave provided for that business is correct and complete
• you have finalised your tax position for that business, for the tax year

YourAfter softwaresubmitting an end of period statement, you will producebe theseable statementsto forsee you.an updated estimate of your tax bill.

CheckWhen theyou deadlineshould forfinalise endyour ofbusiness period statementsincome

The deadline for submittingconfirming an end of period statementsstatement is 31 January after the end of the tax year.

If you do not submitconfirm by the deadline, you may have to pay a late submission penalty.

HowFinalise your Income Tax position

After finalising your business income, you may need to submitsend aHMRC finalinformation declarationon andpersonal payincome taxsources, such as savings or dividend income.

TheThese finalincome declarationsources replacesdo not contribute to your Selfqualifying Assessmentincome taxand return.do Oncenot youfall finaliseunder yourthe incomeMaking byTax submittingDigital anfor endIncome ofTax periodrequirements. statement,This means you do not need to:to report them quarterly, but you can choose to do so.

You can make your final declaration through your Making Tax Digital for Income Tax compatible software if either:

• tellyou’re HMRCable aboutto anysubmit data on all of your personal income sources through your software
• you do not have andany personal income sources to declare

If your software does not support the submission of your personal income sources, it will be possible to use your HMRC online services account to submit claimsthis data instead.

Once you have told HMRC about all of your taxable income for reliefsthe year, you can make your final declaration.

When you make your final declaration, you will be declaring that:

• the information you have provided is correct and complete
• submityou have finalised your finalIncome declarationTax position for the tax year

YouThis mustis submitthe last step of reporting your finalincome declarationto HMRC and payreplaces the need to send a Self Assessment tax youreturn.

When oweto finalise your Income Tax position

You must make your final declaration by 31 January following the followingend of the relevant tax year.

If you miss the deadline for your final declaration, you may need to pay a penalty.

The information provided will then be used to generate your final Self Assessment tax bill for that tax year.

If you do not pay theyour taxSelf youAssessment owetax bill by the deadline,relevant deadlines, you may need to pay a late payment penalty.