MTD for VAT and MTD for Income Tax have different eligibility, reporting and authorisation rules. You may need one or both. Check the software supports the relevant taxes and income sources; completing a VAT return does not complete your personal Income Tax obligations.
Side-by-side
- MTD for VAT — Aimed at VAT-registered businesses. GOV.UK says all VAT-registered businesses should now be signed up; new registrations are enrolled automatically unless exempt. You keep specified VAT records digitally and submit VAT Returns through compatible software.
- MTD for Income Tax — Aimed at sole traders and landlords whose qualifying income brings them into scope on HMRC’s phased timetable (from 6 April 2026 for higher qualifying income). You keep digital income and expense records and send quarterly updates plus a year-end tax return through compatible software.
What you actually send
VAT returns report output tax, input tax and your net VAT position for your VAT period. Income Tax quarterly updates summarise self-employment and/or property income and expenses for fixed update periods — GOV.UK is clear those updates are not full tax returns. Your Income Tax return still pulls in other income (such as employment, savings or dividends) at year end through the software.
Software and sign-up are separate
GOV.UK’s Income Tax software guidance notes that if you are VAT-registered you may already use software for VAT, and you should check whether the same product also works for Making Tax Digital for Income Tax — or use a different compatible product. Authorising software for one tax does not replace authorising it for the other. Use HMRC’s Income Tax software finder for ITSA-compatible options, and the VAT software lists/tools for VAT.
Who should worry about which
- VAT-registered limited company with no personal self-employment or property in scope → MTD for VAT matters; MTD for Income Tax usually does not apply to the company itself in the same way.
- Sole trader above the Income Tax qualifying threshold, not VAT-registered → MTD for Income Tax can apply without any VAT MTD duty.
- Landlord or sole trader who is also VAT-registered → both regimes can apply at once, with different deadlines and penalty systems.
Common mistake
Assuming “I’m already on Making Tax Digital” because VAT Returns go through software. For Income Tax you still need to check qualifying income, sign up when required, and send quarterly Income Tax updates. Start with Check if MTD applies and qualifying income explained.
TaxSimba’s Making Tax Digital service is accountant-led support for Income Tax MTD obligations. We do not claim that using TaxSimba replaces your own HMRC VAT registration duties. If you only need to know whether Income Tax MTD applies, use the MTD checker first.
Give each tax its own reporting calendar
Illustrative preparation example.
Your VAT period ends in June while your personal tax year ends in April. List the two services, software permissions, returns and payment dates separately. A VAT submission receipt should not be filed as evidence that an Income Tax update is complete.
Check: Which receipt belongs to which tax and reporting obligation?
| Check | Practical action |
|---|---|
| Which taxes are you registered for? | Check VAT obligations and personal MTD for Income Tax scope independently. |
| Does the software support both services? | Verify relevant features, income sources and authorisation rather than relying on an MTD label. |
| Which deadline and receipt are you checking? | Keep separate VAT-return and Income Tax-update references. |
Does VAT registration automatically start Income Tax MTD?
No. The programmes have separate eligibility and setup rules. Check the personal qualifying-income test and start date.
Does a limited company's VAT filing cover its director?
No. Company VAT obligations and a director's personal income reporting are different matters. Assess personal trading and property income separately.
Download a checklist for this guide
- List VAT and personal Income Tax obligations.
- Check the software's support for each service.
- Record separate authorisations and access responsibilities.
- Diary both reporting calendars.
- Retain separate submission acknowledgements.