MTD for Income Tax vs MTD for VAT: what’s different

Last checked 19 October 2026

Both schemes have the same name, both need compatible software and both involve sending something to HMRC every quarter. It’s no surprise they get mixed up. But they cover different taxes, different people and different paperwork, and some sole traders will end up using both.

This guide puts the two side by side.

The short version

	MTD for VAT	MTD for Income Tax
Who it covers	VAT-registered businesses	Sole traders and landlords over the qualifying income threshold
When it started	Already in place: GOV.UK says all VAT-registered businesses should now be signed up	6 April 2026 for qualifying income over £50,000; 6 April 2027 for over £30,000; 6 April 2028 for over £20,000
How you join	HMRC signs up new VAT-registered businesses automatically, unless they’re exempt or have applied for an exemption	You sign up yourself, or an agent signs you up
What you send	A VAT Return, usually every 3 months	A quarterly update every 3 months for each business, then a tax return
Deadlines	Usually one calendar month and 7 days after the end of the VAT period, for both the return and the payment	Quarterly updates by 7 August, 7 November, 7 February and 7 May; tax return by 31 January after the tax year
Is the quarterly filing a return?	Yes, it’s your VAT Return and it sets what you pay	No, quarterly updates are summaries, not tax returns

The rest of this guide explains each row.

Who each scheme covers

MTD for VAT follows VAT registration. GOV.UK’s How VAT works page says businesses have to register for VAT if their VAT taxable turnover is more than £90,000, and can choose to register below that. GOV.UK’s Making Tax Digital for VAT page says all VAT-registered businesses should now be signed up, you no longer need to sign up yourself, and HMRC signs up new VAT-registered businesses automatically unless they’re already exempt or have applied for an exemption. Our guide to VAT registration covers the threshold in more detail.

MTD for Income Tax follows your self-employment and property income. GOV.UK’s find out if and when guidance sets out the timetable:

• qualifying income over £50,000 in the 2024 to 2025 tax year: from 6 April 2026
• qualifying income over £30,000 in the 2025 to 2026 tax year: from 6 April 2027
• qualifying income over £20,000 in the 2026 to 2027 tax year: from 6 April 2028

It also says partnerships will need to use MTD for Income Tax in the future, with the timeline to be set out later. Our guide to the £30,000 threshold explains what counts as qualifying income.

What you send, and how often

VAT. GOV.UK’s Submit a VAT Return page says you usually need to send a VAT Return every 3 months, known as your accounting period. The deadline for submitting online is usually one calendar month and 7 days after the end of the period, and that’s also the deadline for paying.

Income Tax. HMRC’s Send quarterly updates guidance says your software adds up your digital records every 3 months to create totals of income and expenses for each business. It describes these as summaries, not tax returns, and says you don’t need to make accounting or tax adjustments before sending one. Each update covers the tax year so far, from 6 April to the end of the period, so you can correct earlier records in the next update.

The update deadlines are 7 August, 7 November, 7 February and 7 May. If you have no income or expenses in a period, HMRC says you still need to send the update. After the year ends, you submit your tax return through your software by 31 January, as HMRC’s Submit your tax return page explains. Our quarterly updates explained and end-of-year return guides go through both.

The big difference is that a VAT Return works out what you owe for that period. An Income Tax quarterly update doesn’t. It gives HMRC running totals and gives you an estimate, and the tax itself is settled through the tax return.

Digital records

Both schemes need digital records, but the detail differs.

For VAT, GOV.UK’s Charge, reclaim and record VAT guide lists what must be kept digitally, including the VAT on what you sell and buy, the time and value of supply for everything you buy and sell, and any adjustments to a return. If you use more than one product, it says they must be digitally linked, and you can’t copy and paste data between software.

For Income Tax, HMRC’s Create digital records guidance says each record needs the amount, the date and a category. It also allows simpler categorisation if your turnover from a self-employment is less than £90,000. In that case, a sole trader only needs to record whether each transaction is income or an expense. If your turnover reaches £90,000, HMRC says you’ll need to categorise that income source’s records in full before you can send your next update.

That £90,000 figure is the same as the VAT registration threshold, and HMRC links the two in its guidance. It’s one reason the schemes overlap for growing businesses.

If you’ll be in both

Some sole traders will be VAT registered and have qualifying income over the Income Tax threshold. A few practical points from HMRC’s guidance:

• Software. HMRC’s Choose the right software guidance says that if you’re VAT registered, you’ll already be using software for VAT. It says to check whether your VAT software is also compatible with MTD for Income Tax, or that the software you choose can meet your VAT needs.
• Separate penalties. HMRC’s penalties guidance says your MTD for Income Tax penalty points are separate from your VAT penalty points. Our MTD penalties guide explains the points system.
• Exemptions. If HMRC has already confirmed you’re digitally excluded from MTD for VAT, GOV.UK says to contact Self Assessment general enquiries with your National Insurance number, VAT registration number and the reason, and whether your circumstances have changed. If they haven’t, it says HMRC will confirm you’re also exempt from MTD for Income Tax. Our MTD exemptions guide has more.
• Different deadlines. Your VAT periods and your Income Tax update periods may not line up, so it’s worth putting both sets of dates in one calendar.

Frequently asked questions

I’m not VAT registered. Can MTD for Income Tax still apply to me?

Yes. MTD for Income Tax depends on your qualifying income, not VAT registration. Use GOV.UK’s find out if and when guidance to check.

Does my VAT software automatically cover Income Tax?

Not necessarily. HMRC says to check whether your VAT software is also compatible with MTD for Income Tax. HMRC’s software finder lists products and what they support.

Do limited companies use MTD for Income Tax?

MTD for Income Tax is for sole traders and landlords. A limited company that’s VAT registered uses MTD for VAT. Our guide to sole trader or limited company explains the differences.

Can I use spreadsheets?

For VAT, GOV.UK says you can use software such as spreadsheets that connect to HMRC systems, with digital links between products. For Income Tax, see our guide to spreadsheets and bridging software.

Sources

All checked on 19 October 2026.

• Making Tax Digital for VAT (GOV.UK, HMRC)
• Submit a VAT Return (GOV.UK)
• How VAT works (GOV.UK)
• Charge, reclaim and record VAT (GOV.UK)
• Find out if and when you need to use Making Tax Digital for Income Tax (GOV.UK, HMRC)
• Send quarterly updates (GOV.UK, HMRC)
• Create digital records (GOV.UK, HMRC)
• Submit your tax return (GOV.UK, HMRC)
• Choose the right software for Making Tax Digital for Income Tax (GOV.UK, HMRC)
• Penalties for Making Tax Digital for Income Tax (GOV.UK, HMRC)
• Find out if you can get an exemption from Making Tax Digital for Income Tax (GOV.UK, HMRC)