Are the calculators HMRC compliant?

Our calculations are built to align with HMRC guidance and use the latest April 2026 rates. However, they're for guidance only – always verify complex cases with HMRC or a qualified professional.

Yes. We're ICO registered (ZC013807) and calculations run in your browser – we don't store sensitive payroll data unless you explicitly save it to your account.

Do you integrate with payroll software?

Reckonly tools work as standalone calculators alongside your existing software like Sage, Xero, and QuickBooks. No integration required – use our tools as a pre-check layer.

What's the VAT registration threshold?

The UK VAT registration threshold is £95,000 taxable turnover in a rolling 12-month period. You must register within 30 days of exceeding this threshold.

Who has to use Making Tax Digital for Income Tax?

From 6 April 2026, sole traders and landlords with qualifying income (self-employment + property) over £50,000 must comply. The threshold drops to £30,000 from April 2027 and £20,000 from April 2028. Limited companies are not yet included — MTD for Corporation Tax has no confirmed start date.

What counts as qualifying income?

Qualifying income is the combined gross income from all self-employment and property businesses before expenses. It does not include employment income, pensions, savings interest, or dividends.

Can I still use spreadsheets under MTD?

Spreadsheets can be used for record-keeping, but they must be digitally linked to MTD-compatible submission software. You cannot manually type figures from a spreadsheet into HMRC — the data must flow digitally.

What is the penalty points threshold for quarterly filing?

For quarterly filers, the threshold is 4 points. Each late quarterly update adds 1 point. Once you reach 4 points, a £200 fixed penalty is charged — and £200 for every subsequent late submission until you reset your points by filing on time for 12 consecutive months.

How do I reset my penalty points?

You must file on time for a continuous compliance period: 12 months for quarterly filers, 24 months for annual filers. You must also have submitted all outstanding returns from the previous 24 months.

What software is MTD-compatible?

HMRC maintains a list of recognised software. Major providers include Xero, Sage, QuickBooks, and FreeAgent. Check that your specific plan includes MTD filing — some entry-level plans may not. Our MTD Compliance Checker tool can assess your software readiness.

What is the End of Period Statement (EOPS)?

After the fourth quarterly update, you submit an End of Period Statement confirming that the figures for each income source are complete and correct. This replaces the old self-assessment return for MTD users.

Is there a soft landing period for MTD ITSA?

HMRC has indicated a light-touch approach for the first year. Penalty points will accrue, but HMRC may show leniency for reasonable excuses during the transition. This is not a formal exemption — you should still aim to file on time.

MTD for Income Tax starts 6 April 2026

Making Tax DigitalCompliance Checker 2026

Check if MTD affects you, assess your software readiness, and calculate exactly what HMRC penalties could cost you. Free for sole traders, landlords, and accountants.

Check MTD Readiness

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MTD Income Tax Thresholds

MTD for Income Tax is rolling out in phases based on qualifying income (self-employment + property income combined).

Mandatory now

£50,000+

From 6 April 2026

Sole traders and landlords with qualifying income over £50,000 must use MTD-compatible software for quarterly updates from this date.

Mandatory from 2027

£30,000+

From 6 April 2027

The threshold drops to £30,000. Businesses in this band should be preparing now — trialling software and switching to digital records.

Mandatory from 2028

£20,000+

From 6 April 2028

The threshold drops again to £20,000. HMRC has not confirmed a date for incomes below £20,000.

Quarterly Submission Deadlines

Under MTD ITSA, you must submit quarterly updates to HMRC instead of a single annual return.

6 April – 5 July

Deadline: 7 August

First quarterly update of the tax year.

6 July – 5 October

Deadline: 7 November

Second quarterly update.

6 October – 5 January

Deadline: 7 February

Third quarterly update.

6 January – 5 April

Deadline: 7 May

Final quarterly update plus End of Period Statement.

HMRC Penalty Regime

The new points-based penalty system replaces automatic fixed penalties. Late submissions accrue points; late payments attract percentage charges.

Late submission

Points-based system. Each late quarterly update adds 1 point. At the threshold (4 points for quarterly filers), a £200 penalty applies — plus £200 for every subsequent late submission.

Late payment (day 16)

2% of tax outstanding at day 15 after the due date.

Late payment (day 31)

Additional 2% of tax outstanding at day 30.

Late payment (day 31+)

4% per annum on the outstanding balance from day 31 until payment.

Late payment interest

Bank of England base rate + 2.5% (currently ~7.25%) charged daily on unpaid tax.

MTD Readiness Checklist

Use this checklist to prepare for MTD for Income Tax. Critical items must be completed before your compliance date.

Critical

Switch to MTD-compatible software (Xero, Sage, QuickBooks, FreeAgent, or HMRC-recognised alternative)

Critical

Ensure all business records are kept digitally — no paper-only records

Critical

Set up digital links between software — no copy/paste between systems

Critical

Authorise your software to connect to HMRC via the MTD API

Critical

Know your quarterly submission deadlines (7 Aug, 7 Nov, 7 Feb, 7 May)

Inform your accountant or tax agent

Review and categorise all income sources (self-employment + property)

Making Tax Digital — Frequently Asked Questions

Common questions about MTD for Income Tax in 2026/27.

HMRC rates confirmed — updated March 2026

Check Your MTD Readiness Now.

Find out if MTD affects you, check your software compliance, and calculate potential penalties — all in under 2 minutes. Free for all users.

Check MTD Readiness Browse All 32 Tools

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Corporation Tax CalculatorCorporation tax with marginal relief.

Making Tax DigitalCompliance Checker 2026

MTD Income Tax Thresholds

Quarterly Submission Deadlines

HMRC Penalty Regime

MTD Readiness Checklist

Making Tax Digital — Frequently Asked Questions

Check Your MTD Readiness Now.

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