MTD for Income Tax: Year end explained

With the introduction of MTD for Income Tax, the focus has understandably been on the quarterly filing element.

But what about the end of the year? What happens then?

Although the tax rules remain the same under MTD, it does change the year-end process. Instead of filing a traditional Self Assessment tax return, clients who fall within MTD for Income Tax complete a final declaration.

In short – how MTD for Income Tax works in practice

• Clients still pay tax on 31 January and 31 July
• Income is reported during the year through quarterly updates
• The year is finalised via a Final Declaration
• The final declaration replaces the SA100 for MTD for Income Tax clients

The main shift is when information is sent to HMRC, not how much tax is paid.

What is the final declaration?

The final declaration is HMRC’s end-of-year submission under MTD for Income Tax. In simple terms, it performs the same role as the current Self Assessment return.

It is where the client:

• Confirms their total taxable income for the year
• Finalises adjustments, reliefs and claims
• Agrees the final Income Tax and Class 4 NIC position with HMRC

By the time the final declaration is submitted, HMRC already holds quarterly summaries of business and property income. The final declaration is the point at which everything is checked, completed and formally confirmed.

How the MTD year works

Under MTD for Income Tax, reporting is spread across the year rather than concentrated almost entirely at year end.

During the tax year, clients (or their accountant) send four quarterly updates for each self-employment and property source. These are cumulative totals of income and expenses, without accounting or tax adjustments. If figures change, they are corrected in later updates rather than by resubmitting earlier ones.

The final declaration brings everything together. It includes:

• Business and property income, accounting and taxable adjustments
• Other income such as PAYE, dividends or savings
• Final calculations for tax and National Insurance

Although the process is more structured, MTD does not change payment dates. Quarterly updates do not trigger tax bills, and HMRC’s in-year figures remain estimates.

Key dates

The first mandated final declaration will be for the 2026/27 tax year, due by 31 January 2028. This applies to sole traders and landlords whose gross self-employment and/or property income exceeded £50,000, based on their 2024/25 tax return.

Although there is a soft-landing period for late quarterly updates in 2026/27, the final declaration deadline carries the same importance as a traditional Self Assessment filing.

Using TaxCalc for MTD year end

TaxCalc supports MTD quarterly filing through MTD Quarterly Filer [link] and final declaration for MTD for Income Tax.

Even if quarterly updates are submitted using other MTD-compatible tools, TaxCalc can still be used for the year-end final declaration, helping practices retain control over finalisation and compliance.

Final declaration filing will be available in TaxCalc’s upcoming release targeted for late August.