Does MTD replace Self Assessment?

Checked against GOV.UK on 14 August 2026

The single most common misunderstanding. Making Tax Digital does not abolish the tax return — it changes how the return is prepared and adds four in-year submissions in front of it.

What stays the same

• One tax return a year, due 31 January after the end of the tax year
• The dates you pay tax, and how you pay
• The income and expense categories — MTD uses the same ones as Self Assessment
• Keeping your original paperwork

What changes

• Records for self-employment and property move into compatible software
• Four quarterly updates a year, per business
• The return is completed and submitted from that software, not the old online form
• New points-based penalties replace the old late filing and late payment penalties for your personal return

The transition year

The return for the tax year before you start MTD is filed the ordinary way. For someone who started in April 2026: the 2025 to 2026 return goes in by 31 January 2027 as normal, and the first MTD return, for 2026 to 2027, is due by 31 January 2028.

What HMRC fills in for you

HMRC adds what it already holds: employment (PAYE) income; student loan and postgraduate loan plan type, including repayments taken from PAYE; state, private and occupational pension income; other taxable state benefits; Construction Industry Scheme subcontractor deductions; Capital Gains Tax residential property disposals; and Marriage Allowance claims. You must check it before you submit.

What you add yourself

Savings interest; your share of profit from a partnership as an individual partner; dividends, including from your own company; payrolled benefits in kind not subject to Class 1A National Insurance; and any other income or gains not added automatically.

Two limits worth knowing

• You cannot claim a tax refund in your tax return through MTD — refunds are claimed separately.
• You can change a submitted return within 12 months of the submission deadline, using your software. If the change is to your underlying records and you have not yet submitted, correct the digital records instead.

New penalties, not old ones, on prior years

The new penalties apply from the tax year you join MTD. Current penalties still apply to previous tax years — HMRC's example: joining on 6 April 2026 means current penalties apply to the 2025 to 2026 return deadline of 31 January 2027. The new penalties also do not apply to non-resident company, trust or estate, or partnership returns.

Sources

• Use Making Tax Digital for Income Tax: submit your tax return (HMRC guidance)
• Penalties for Making Tax Digital for Income Tax (HMRC guidance)
• Use Making Tax Digital for Income Tax: send quarterly updates (HMRC guidance)

General information about UK tax rules, not tax advice. Your own circumstances and HMRC's official guidance govern your position. If you are unsure, speak to an accountant or contact HMRC. Tax rules change — if this page is more than a few months old, check the GOV.UK pages linked above. Found an error? Email hello@getaxionlabs.com and we will correct it.

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