5 Critical Things You Must Know About The HMRC January 2026 Deadline: The Final Countdown To MTD ITSA

The HMRC deadline of 31 January 2026 is not just another annual tax filing date; it represents the final traditional hurdle before a monumental shift in the UK’s tax system. As of December 2025, this date marks the absolute final day to submit your online Self Assessment tax return and pay any tax due for the 2024/2025 tax year. Missing this deadline will trigger an immediate late filing penalty from His Majesty's Revenue and Customs (HMRC). This particular deadline is critical because it immediately precedes the phased introduction of Making Tax Digital for Income Tax Self Assessment (MTD ITSA), which begins just a few months later in April 2026. For millions of sole traders and landlords, the 31 January 2026 submission will be one of the last times they file under the old annual system, making it an essential opportunity to prepare for the new era of digital record keeping and quarterly reporting.

The Core Deadline: 31 January 2026 for the 2024/2025 Tax Year

The most immediate and non-negotiable deadline is the one that has been a fixture in the UK tax calendar for years.

What the 31 January 2026 Deadline Covers

The deadline of 11:59 pm on 31 January 2026 is the final date for two main actions related to the tax year that ran from 6 April 2024 to 5 April 2025:

• Online Self Assessment Tax Return Submission: All individuals, including self-employed individuals, sole traders, and landlords, who are required to file a Self Assessment must submit their return online by this date.
• Payment of Tax Bill: Any outstanding tax liability for the 2024/2025 tax year, including the first payment on account for the 2025/2026 tax year, must be paid to HMRC.

The deadline for paper tax returns for the same tax year has already passed (31 October 2025), meaning all remaining submissions must be made digitally.

Penalties for Missing the Deadline

HMRC is strict on late submissions. If you miss the 31 January 2026 deadline, you will automatically face a penalty:

• Immediate Penalty: A £100 late filing penalty is issued automatically, even if you have no tax to pay or if you pay your tax on time.
• Further Penalties: Additional penalties accumulate the longer the return remains unfiled, including £10 per day after three months (up to a maximum of £900), and further charges after six and twelve months.
• Late Payment Penalties: Interest is charged on any unpaid tax, and further late payment penalties apply after 30 days, six months, and twelve months.

The Countdown to Making Tax Digital (MTD ITSA) in April 2026

While the January 2026 deadline closes the book on the 2024/2025 tax year, the biggest tax change in a generation is set to begin just over two months later. The phased rollout of Making Tax Digital for Income Tax Self Assessment (MTD ITSA) starts on 6 April 2026. This transition is crucial for anyone currently filing a Self Assessment.

Who is Affected by MTD ITSA in 2026?

MTD ITSA will fundamentally replace the traditional Self Assessment process for certain groups. The initial phase of MTD ITSA, starting in April 2026, will apply to:

• Sole Traders and Landlords: Individuals who have income from self-employment or property (or both).
• Income Threshold: Only those with gross income from these sources above £50,000 will be mandated to join MTD ITSA from April 2026.

A second phase, starting in April 2027, will extend the mandate to those with gross income over £30,000.

The Digital Revolution: Key MTD ITSA Changes

The new system moves away from a single annual tax return to a year-round digital process. This dramatically changes the compliance obligations for affected taxpayers:

1. Digital Record Keeping: Taxpayers must keep digital records of their business and/or property income and expenditure using MTD-compatible software. Spreadsheets will no longer suffice unless they are bridged to approved MTD software.

2. Quarterly Updates: Instead of one annual submission, taxpayers will be required to submit summary updates of their income and expenses to HMRC every three months (quarterly). These are not full tax returns but estimates to give HMRC a near real-time view of tax liability.

3. End of Period Statement (EOPS): Following the final quarterly update, an annual End of Period Statement (EOPS) must be submitted to finalise the business income for the tax year.

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4. Final Declaration: A final declaration, similar to the current Self Assessment, will be required to bring together all income sources (including employment, pensions, etc.) and claim any reliefs or allowances.

4 Actionable Steps to Prepare for the January and April 2026 Deadlines

For those who will be caught by the new MTD ITSA rules, the January 2026 deadline is the perfect time to review your current processes and make the necessary preparations.

1. Finalise Your 2024/2025 Records Now

Do not wait until January 2026. Gather all necessary documentation for the 2024/2025 tax year, including invoices, receipts, bank statements, and P60s. Getting your records in order now reduces the stress of a last-minute rush and ensures you meet the submission and payment deadlines. This review process can also highlight any gaps in your current record-keeping that need to be addressed before the digital mandate begins.

2. Assess Your MTD ITSA Readiness

Determine if your gross income from self-employment and/or property will exceed the £50,000 threshold for the 2026/2027 tax year. If it does, you must be ready to start keeping digital records from 6 April 2026. This means researching and selecting HMRC-approved software well in advance. Accountants and tax advisors can offer invaluable guidance on the transition.

3. Budget for the Payment on Account

When you submit your return and pay your 2024/2025 tax bill by 31 January 2026, you will also be required to make a first Payment on Account towards your 2025/2026 tax bill. This is typically 50% of the previous year's tax liability. Failing to budget for this can lead to unexpected cash flow issues in January.

4. Understand the New Penalty System

HMRC is also introducing a new points-based penalty system for MTD ITSA. While the specifics are complex, the takeaway is simple: late submissions of your new quarterly updates will incur points, leading to financial penalties once a certain threshold is reached. Familiarise yourself with the new compliance regime to avoid future sanctions. The focus shifts from a single annual deadline to consistent, accurate, and timely quarterly reporting.

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