What happens at the end of the tax year in Making Tax Digital?

At the end of the tax year you make adjustments, add your other income and send your tax return from MTD software by 31 January. For 2026-27, that is 31 January 2028. There is no End of Period Statement.

Making Tax Digital for Income Tax (MTD) spreads your record keeping across the year, but the year still finishes in one place: your tax return. Earlier designs also had an End of Period Statement. On 22 November 2023 the government said it would remove that requirement. The 2026 regulations do not include one, and the current GOV.UK guidance finishes the year in the tax return instead.

The year in one table

This is the first MTD year for people who started on 6 April 2026, using standard update periods. Anyone starting on 6 April 2027 follows the same pattern one year later.

You do not have to wait for January. GOV.UK says you can submit the return earlier, but your quarterly updates must be sent first.

Step one: adjust the year's figures

Once your fourth update is sent, HMRC has your income and expenses for each business for the whole year. Quarterly updates need no tax adjustments, so this is where they are made. GOV.UK lists:

• claiming reliefs or allowances, such as the trading income allowance or Rent-a-Room relief
• tax adjustments, such as taking out costs you cannot claim
• accounting adjustments for prepayments and accruals, which only apply if you use traditional accounting rather than cash basis, the default
• adjustments if your accounting period does not match the tax year
• capital allowances, which HMRC only processes once your tax return is in

Most adjustments change the annual total for a category, not each transaction. A plumber whose phone is used for work and home reduces "phone, fax, stationery and other office costs" to the business share. If you used simplified expenses, such as flat-rate mileage, that adjustment is made now too. If you find a mistake in your records after the fourth update, either correct the records and resend the fourth update before making tax adjustments, or adjust the category total and update your records to match.

Step two: add your other income

Your quarterly updates only covered self-employment and property. The tax return covers everything. HMRC adds what it already holds, including PAYE wages, pensions, taxable state benefits, student loan details and CIS deductions. You must check those figures. You add the rest yourself, such as savings interest, dividends and a partner's share of partnership profit.

For CIS subcontractors this matters. HMRC adds your CIS deductions to your MTD tax return, and any refund is requested separately through HMRC online services. GOV.UK says you cannot claim a refund in the MTD tax return itself.

Step three: submit and pay

In your software, you view and check the tax calculation, then declare the information is correct and complete. A main agent can submit for you, but only after you have seen the figures and confirmed them in writing. MTD does not change how or when you pay: the bill still falls due by 31 January.

What this means for you

If you started in April 2026, your first fourth update is due by 7 May 2027 and your first MTD tax return by 31 January 2028. If you start in April 2027, your 2026-27 return is still an ordinary Self Assessment return, due by 31 January 2028, and your first MTD return is for 2027-28, due by 31 January 2029.

A late tax return earns a penalty point. Points can also apply to late quarterly updates, from 2027-28 if you joined in April 2026, or from 2028-29 if you join in April 2027 (the 28 October 2026 Budget said that group gets no points for 2027-28 updates). Reaching 4 points means a £200 penalty. For CIS subcontractors, a refund is requested through HMRC online services after the MTD tax return is submitted, so there is no need to wait until January to file.

Steps to close the year

1. Send your fourth quarterly update by 7 May, after checking the year's records are complete.
2. Make your adjustments: personal use, simplified expenses, capital allowances and any allowance you are claiming.
3. Check the income HMRC has added, such as wages, pensions and CIS deductions.
4. Add savings interest, dividends and any other income HMRC does not hold.
5. Check the tax calculation, then submit by 31 January.
6. Pay what you owe by 31 January, and request any refund through HMRC online services.

The free MTD check shows your start date. The trades section and landlords section have more on how we handle the year end.