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5 Critical Things You Must Know About The HMRC January 2026 Deadline: MTD And Self Assessment

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The HMRC January 2026 deadline is rapidly approaching, and for millions of UK taxpayers, this date holds two critical, interlinked meanings. As of the current date in December 2025, it marks the standard, non-negotiable end-point for filing and paying your Self Assessment tax bill for the 2024/2025 tax year. However, for a significant number of sole traders and landlords, this single tax return will also be the decisive factor that mandates their entry into the new, mandatory Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) regime starting just a few months later in April 2026.

Failing to meet the 31 January 2026 deadline carries the usual financial penalties, but for those on the cusp of the new digital rules, an accurate and timely submission is essential to prepare for the biggest change to the UK tax system in decades. Understanding this dual importance is key to ensuring compliance and avoiding future complications.

1. The Two-Part Significance of the 31 January 2026 Deadline

For the 2024/2025 tax year, the deadline of 11:59pm on 31 January 2026 is the absolute final date for two main actions: the online submission of your Self Assessment tax return and the payment of any tax owed. This is a standard, annual requirement, but its proximity to the MTD for ITSA rollout gives it new weight.

A. The Standard Self Assessment Filing and Payment Deadline

This deadline applies to all individuals who need to file a Self Assessment tax return for the tax year that ran from 6 April 2024 to 5 April 2025. This includes sole traders, partners, company directors, and individuals with rental income, significant investment income, or income from overseas.

  • Online Submission: The online return must be filed via GOV.UK by 31 January 2026.
  • Payment Due: Any tax owed for the 2024/2025 tax year, along with the first payment on account for the 2025/2026 tax year, must also be paid by this date.

B. The Crucial MTD for ITSA Threshold Calculation

The information you submit in your 2024/2025 Self Assessment tax return is what HMRC will use to determine if you must comply with Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) from 6 April 2026.

This makes the January 2026 submission the critical 'test' for digital compliance. If your gross income from self-employment and/or property exceeds the £50,000 threshold based on this return, you will be mandated to join MTD ITSA in April 2026.

2. Who is Mandated to Join Making Tax Digital (MTD) in April 2026?

The phased introduction of MTD for ITSA is set to fundamentally change how sole traders and landlords report their income to HMRC. The January 2026 deadline is the final step before the first wave of mandatory compliance begins.

Key Compliance Criteria for April 2026

You will be required to comply with MTD for ITSA from 6 April 2026 if you are an individual (sole trader or landlord) with a combined gross income from self-employment and/or property exceeding £50,000 in the 2024/2025 tax year.

The gross income calculation uses the figures reported in your Self Assessment return due by 31 January 2026. If you have both property and self-employment income, the two figures are combined to check against the £50,000 threshold.

3. The New Digital Requirements: Quarterly Updates and Digital Records

For those who cross the £50,000 threshold and are mandated to join MTD for ITSA in April 2026, the traditional annual tax return is replaced by a system of digital record-keeping and regular submissions.

The Four New Obligations Under MTD for ITSA

The new regime, which starts for the 2026/2027 tax year, requires a complete shift in accounting practice. You must use MTD-compatible software to manage your records and submissions.

  1. Digital Record Keeping: All records of income and expenditure must be kept digitally from 6 April 2026.
  2. Quarterly Updates: You must submit an electronic summary of your business or property income and expenses to HMRC four times a year. These are not full tax returns but estimates to help HMRC calculate your tax position in near real-time.
  3. End of Period Statement (EOPS): After the end of the tax year (5 April), you must finalise your business income and expenses for the year and submit an EOPS.
  4. Final Declaration: This replaces the final Self Assessment tax return and includes all other sources of income (e.g., dividends, interest) to finalise the tax due for the year.

Key MTD ITSA Dates for 2026/2027

For the first year of MTD for ITSA compliance (2026/2027), the deadlines for quarterly updates will look like this:

  • 6 April 2026: Mandatory start date for digital record keeping.
  • 7 August 2026: Deadline for the first Quarterly Update (for the period 6 April to 5 July 2026).
  • 7 November 2026: Deadline for the second Quarterly Update.
  • 7 February 2027: Deadline for the third Quarterly Update.
  • 7 May 2027: Deadline for the fourth Quarterly Update.
  • 31 January 2028: Final Declaration and payment deadline for the 2026/2027 tax year.

4. Severe Penalties for Missing the January 2026 Deadline

Even if you are not affected by MTD for ITSA, missing the 31 January 2026 deadline for your 2024/2025 Self Assessment return will trigger immediate and escalating penalties. HMRC is strict on these deadlines.

  • 1 Day Late: An automatic £100 initial fine is charged immediately.
  • 3 Months Late: A daily penalty of £10 is charged for up to 90 days, totalling up to £900.
  • 6 Months Late: A further penalty of 5% of the tax due or £300 (whichever is greater) is added.
  • 12 Months Late: Another 5% of the tax due or £300 (whichever is greater) is added, potentially reaching a total penalty of £1,600 or more, plus the interest charged on the overdue tax.

Crucially, late payment penalties also apply. You must pay your tax bill by 31 January 2026 to avoid additional late-payment penalties and interest charges.

5. What to Do If You Cannot Pay Your Self Assessment Bill

HMRC recognises that some taxpayers may struggle to pay their tax bill in full by the 31 January 2026 deadline. In such cases, the best course of action is to communicate with HMRC early to set up a Time to Pay (TTP) arrangement.

A TTP arrangement is a formal, agreed-upon instalment plan that allows you to spread the cost of your tax bill over a period of up to 12 months. This helps prevent the accumulation of severe late-payment penalties, though interest will still be charged on the outstanding amount.

How to Set Up a Time to Pay Arrangement:

You can usually set up a TTP arrangement online if you meet certain criteria, which typically include owing less than £30,000, having no other outstanding tax returns, and having no other HMRC payment plans in place. If your tax debt is higher or your circumstances are complex, you must call the HMRC Self Assessment Payment Helpline.

Do not ignore the deadline. Filing on time, even if you cannot pay, prevents the immediate £100 late-filing penalty and shows HMRC you are engaging with your tax obligations. The TTP scheme is a vital lifeline for taxpayers facing temporary financial difficulty.

5 Critical Things You Must Know About the HMRC January 2026 Deadline: MTD and Self Assessment
hmrc january 2026 deadline
hmrc january 2026 deadline

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