MTD myths and what's actually true
A lot of what people have heard about Making Tax Digital is wrong. This page goes through the most common myths and gives you the straight answer.
Why there's so much confusion
MTD for Income Tax has been delayed, reshaped, and partially redesigned several times since it was first announced. Each change left behind articles, forum posts, and guidance notes that were accurate at the time but are now wrong. Some of it is still being indexed and read today.
There's also a vocabulary problem. Terms like "quarterly return", "End of Period Statement", and "Final Declaration" have been used inconsistently by HMRC, the press, and software providers at different points in the timeline. That's made it easy to end up with a picture of how MTD works that doesn't match the system that actually launched in April 2026.
The myths below are ones we see come up regularly. Some are simple misunderstandings. Some are things that were true in an earlier design but are no longer true now.
The myths, one by one
Myth 1
You pay tax four times a year under MTD.
The truth
Quarterly updates do not trigger a tax payment. They are a summary of your income and expenses for the period, submitted through your software. No tax is charged as a result of sending one. Tax is still worked out annually and paid through your MTD tax return, with the same payment deadlines as before.
Myth 2
Quarterly updates are four mini tax returns.
The truth
They are not tax returns and they do not finalise your tax position. You are not confirming a final position on your tax affairs or signing off anything permanent. The figures you submit are cumulative totals, and you can correct them in a later quarter. The only submission with declaration status is the annual tax return. See what quarterly updates actually involve for the full detail.
Myth 3
If you have an accountant, MTD doesn't apply to you.
The truth
Your accountant can handle the work on your behalf, but the legal obligation sits with you as the taxpayer. Using an accountant is not a route to exemption. Exemptions from MTD do exist, but they are based on specific personal circumstances, not on whether you have professional help. See MTD exemptions and how to apply for what actually qualifies.
Myth 4
HMRC will write to you if you need to sign up.
The truth
HMRC does send letters to many people it believes are in scope, but the legal duty to check and sign up rests with the taxpayer regardless. A letter is not a condition of the obligation applying to you. If you meet the threshold based on your 2024/25 tax return, the deadlines applied from April 2026 whether or not you received a letter. Since September 2026, HMRC has also been signing up people who needed to start MTD in April 2026 but had not signed up. If HMRC has not signed you up yet, do not wait. Sign up yourself, or ask your accountant to do it, and start catching up on your quarterly updates.
Myth 5
There is a step called the End of Period Statement (EOPS).
The truth
EOPS was part of the original MTD design. It was permanently removed before the system launched in April 2026. It no longer exists as a submission step. The functions it was designed to perform are now handled within the annual MTD tax return. Any content that still describes EOPS as a current requirement is out of date.
Myth 6
Spreadsheets are banned under MTD.
The truth
Spreadsheets are still usable under MTD, provided they are connected to HMRC through bridging software with a proper digital link. Where figures move from your spreadsheet into bridging or submission software, that transfer must happen through a digital link, not by retyping or copy-pasting. See bridging software for spreadsheet users for what does and doesn't qualify.
What to do if you're not sure what applies to you
The two most common uncertainties behind these myths are whether MTD actually applies to you, and whether your specific situation might qualify for an exemption.
For the first, the thresholds and who is affected covers the qualifying income rules and the phase-in dates. For the second, MTD exemptions and how to apply sets out what HMRC will and won't accept.
Common questions
Not since April 2026. Autumn Budget 2026 did exempt some smaller groups until further notice, such as people eligible for qualifying care relief.* The dates for everyone else are unchanged. The system launched on 6 April 2026 for sole traders and landlords with qualifying income over £50,000. There have been multiple delays in previous years, which is partly why there's so much outdated information in circulation, but the current mandation dates are set in legislation. The £30,000 threshold follows in April 2027 and the £20,000 threshold in April 2028.
Since September 2026, HMRC has been signing up people who needed to start MTD in April 2026 but had not signed up, and writing to tell them. If HMRC has not signed you up yet, do not wait. Sign up yourself, or ask your accountant to do it, and start catching up on your quarterly updates. When HMRC signs you up, it only uses the information it already holds, and it does not move any deadlines.
The penalty system under MTD is points-based. Missing a quarterly update deadline earns one penalty point, and penalties only kick in once you reach the points threshold. There is also a soft landing on penalty points in your first MTD year: 2026/27 for the April 2026 group, and 2027/28 for those joining in April 2027*, which gives some room while people get to grips with the system. If you have missed deadlines because you were working from incorrect information, getting set up properly now limits further exposure. A conversation with an accountant is the right starting point.
The £50,000 figure is qualifying income, not turnover, and it combines all your self-employment and property income sources on a gross basis, before expenses. It is also based on your 2024/25 tax return, not your current year's figures. A sole trader with £30,000 of self-employment income and £25,000 of property income is in scope for April 2026 even though neither source alone exceeds £50,000.
*Announced in the Budget on 28 October 2026. A Budget announcement becomes law in one of two ways. Most tax changes go into the annual Finance Bill, which becomes law when it receives Royal Assent, usually early the following year. Others are made by regulations laid before Parliament. Until then, the details can change.
This page is general guidance, not advice for your own circumstances. It was correct as at the date shown at the top, and tax rules and rates change over time. Please take advice on your own position before acting on anything here.
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