Making Tax Digital for Income Tax was first proposed in December 2015 with a start date of 2018. It actually began on 6 April 2026, an eight-year gap produced by four separate announcements. That history, not any current policy, is why "MTD deadline extended" is still typed into search engines every month.
It has not been extended again. The last deferral was announced on 19 December 2022, and every change since has either added a phase or simplified the mechanics rather than pushing dates back. This guide sets out which deferrals genuinely happened, what the timetable looks like now, the one piece that is still open-ended, and what a limited company contractor with side income should be doing about it this year.
The deferral history behind the contractor rumour mill
Understanding why contractors expect another delay makes it easier to see why one is unlikely. The programme slipped four times, and each slip was announced formally rather than drifting quietly.
| Announcement | What it did | Start date after the change |
|---|---|---|
| December 2015 roadmap | Proposed digital records and quarterly updates across Income Tax, VAT and Corporation Tax | From 2018 |
| July 2017 ministerial statement | Pulled Income Tax out of the first wave, leaving VAT to go first | Income Tax not before April 2020 |
| July 2020 announcement | Set a firm Income Tax start date for sole traders and landlords | April 2023 |
| September 2021 | Deferred by a further year, citing pandemic pressures | April 2024 |
| 19 December 2022 | Deferred again and introduced phasing by income level | April 2026 for over £50,000 |
| Spring Statement 2025 | Added a third phase rather than delaying the existing ones | April 2028 for over £20,000 |
Two things stand out. First, the deferrals stopped in December 2022, and the phasing introduced then is exactly what has since been delivered. Second, the most recent change went the other way: Spring Statement 2025 pulled more people into scope from April 2028 rather than granting anyone more time. A contractor reading the pattern as "it always gets delayed" is reading a period that ended more than three years ago.
What is fixed now, and what is still genuinely deferred for contractors
The live timetable has three phases, each tested against a specific past tax year:
| Mandated from | Qualifying income over | Return HMRC tests | Filing deadline for that return |
|---|---|---|---|
| 6 April 2026 | £50,000 | 2024/25 | 31 January 2026 (passed) |
| 6 April 2027 | £30,000 | 2025/26 | 31 January 2027 |
| 6 April 2028 | £20,000 | 2026/27 | 31 January 2028 |
Against that, one part of the programme really is still deferred with no date attached. HMRC's guidance says partnerships will need to use MTD for Income Tax in future and that the timeline will be set out later. A partnership start date of April 2025 was floated back in 2021 and then dropped. So a contractor trading through a general partnership or an LLP continues filing the existing partnership return, indefinitely, until HMRC publishes something. That is the single genuine "extension" still running, and it is far narrower than the rumour suggests.
The other simplification worth knowing is that the End of Period Statement was scrapped at Autumn Statement on 22 November 2023, with its function folded into the final declaration. The year is now four quarterly updates plus one final declaration, not five submissions plus a return. Older explainers that still describe an EOPS are out of date.
The two-years-back test is what actually catches contractors
The mechanic that surprises people is not the threshold, it is the lag. HMRC decides whether you are mandated by looking at the Self Assessment return for the tax year two years before the phase starts. Mandation from April 2027 turns on your 2025/26 figures, a return most contractors will not even file until January 2027.
Three consequences follow, and they all cut against the wait-and-see instinct:
- The deciding number is already history. If your 2025/26 gross side income was over £30,000, the April 2027 obligation is settled. Trading differently in 2026/27 changes nothing.
- A drop in income does not release you. Falling below the threshold in later years does not switch the obligation off automatically, and HMRC's exit route needs a sustained run of years below the level, not one quiet year.
- The test is gross, not profit. Qualifying income is gross sole-trade fees plus gross rents, added together before any expenses. A property with £26,000 of rent and a large mortgage may produce almost no taxable profit and still count as £26,000.
Take a worked case. A PSC contractor draws a £12,570 salary and £65,000 of dividends, and separately runs a small training side business in their own name that billed £21,000 gross in 2025/26 and lets a flat producing £11,000 of gross rent. The company income is irrelevant. The qualifying income is £21,000 plus £11,000, which is £32,000, over the £30,000 line. That contractor is mandated from 6 April 2027, despite believing throughout that MTD was a sole trader problem and nothing to do with them.
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What did not change for a PSC contractor
The headline exclusion is unchanged and is worth restating, because it is the reason most readers of this site can stop worrying about the timetable entirely. A contractor operating through a personal service company and drawing salary and dividends generally has nil qualifying income, and company profits sit under Corporation Tax rather than Self Assessment. Our guide to MTD for Income Tax for contractors works through the scope test in full, and the PSC and limited company contractor tax guide covers how the company layer is actually taxed.
Also unchanged:
- Payment dates. The balancing payment and first payment on account are still due by 31 January, the second by 31 July. Quarterly updates are information, not invoices. The contractor Self Assessment guide sets out how those dates work.
- The amount of tax. MTD alters reporting, not rates, allowances or the personal allowance.
- Your IR35 position. MTD and the off-payroll working rules answer different questions and do not interact. Nothing in the MTD timetable changes how status is determined on an engagement, which our guide to what IR35 is covers.
What a contractor should actually do this tax year
If you have any income outside your company, four steps are worth taking in 2026/27 rather than later.
- Calculate your qualifying income from the right year. For the April 2027 phase, add gross sole-trade fees and gross rents for 2025/26, before expenses. That is the number that decides it. Do not include salary, dividends, savings interest or employment income, none of which count.
- Classify each income source once, properly. The most common error is treating dividends or a director's salary as qualifying income and panicking, or treating a genuine sole-trade sideline as company income and relaxing. Write the sources down and label each one.
- Get the side income into compatible software before the mandation date. A trade or property business that has always been reconstructed each January needs a running digital record. Starting the habit a year early costs little; starting it in the first mandated quarter is where people pick up penalty points.
- Decide who files. Four quarterly updates plus a final declaration is five deadlines a year rather than one. Agree now whether you or your accountant will submit them, and diarise the quarter ends.
Why planning around another delay is the expensive contractor mistake
The wait-and-see strategy has an asymmetric payoff, and the asymmetry runs the wrong way. If you prepare and a delay arrives, you have lost nothing beyond having tidy records a year early, which is useful in itself. If you do not prepare and no delay arrives, you enter a mandated year with paper records, no software, no digital link and a quarterly deadline roughly a month after the first quarter end.
The evidence also points one way. April 2026 landed on schedule, the 2025 change added scope rather than removing it, and HMRC has published thresholds, tested years and guidance for all three phases. Betting against that on the strength of deferrals that stopped in 2022 is not a forecast, it is a habit.
To summarise: Making Tax Digital for Income Tax slipped four times between 2015 and 2022 and has not slipped since. The phases are fixed at £50,000 from April 2026, £30,000 from April 2027 and £20,000 from April 2028, each tested on the return from two years earlier, with partnerships the only genuine open deferral left. A PSC contractor on salary and dividends is generally outside all of it, but personal side income is tested on its own and gross. If you want your own position checked against the right year's figures before the next phase lands, our contractor accountancy services cover structure, reporting and ongoing compliance, and you are welcome to get in touch.