HMRC Confirm MTD for Income Tax Digital Link Requirements
HMRC have confirmed that only the quarterly update figures need to be digitally linked for the upcoming Making Tax Digital for Income Tax
If you’ve ever searched through HMRC’s vast resources for clarification on something, you’ll know how frustrating and time-consuming it can be. We experienced this first-hand when trying to confirm exactly which figures must be digitally linked for the upcoming Making Tax Digital (MTD) for Income Tax. After struggling to find clear and concise guidance, we contacted the HMRC Software Development Support Team directly. The answer was a pleasant surprise - the amount of information that actually needs to be digitally linked being far less than we expected!
What Does “Digital Link” Mean?
In the context of Making Tax Digital, a “digital link” means that the figures submitted to HMRC must flow between your records and your MTD-compatible software without any manual re-typing or copy-and-paste. Once a transaction has been entered or captured digitally, every transfer of that data - from the source record through to HMRC - must remain digital. For example, if you record self-employment income and expenses in a spreadsheet, and that spreadsheet is used to summarise the totals, those summary figures must be digitally extracted by bridging software (such as Easy MTD) before being submitted to HMRC.
What Needs to Be Digitally Linked?
You don’t need to worry about digitally linking every single figure normally required for a Self Assessment return, along with the additional quarterly update figures expected under MTD for Income Tax. In fact, only the quarterly update income and expense totals for each business or property income source must be digitally linked. That’s good news - especially for taxpayers who keep their records in a spreadsheet, a notebook, or even on the back of a cigarette packet (or perhaps these days, a vape packet!).
This clarification means that annual summaries, accounting adjustments, and brought-forward loss amounts for each business or property income, along with personal income, tax reliefs, and deductions, do not need to be digitally linked. These can be typed or copy-and-pasted into your MTD-compatible software. With Easy MTD, you have the flexibility to either digitally link this information or enter it manually. However, for quarterly update income and expense figures, you must digitally link them from the spreadsheet, text, or CSV file where they are recorded.
What Figures Do Quarterly Updates Contain?
The figures that must be digitally linked for quarterly updates depend on the type of income — whether it relates to self-employment, UK property, or foreign property.
| Business type | Income fields | Expense fields |
|---|---|---|
| Self-employment |
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| UK property |
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| Foreign property |
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If the turnover for a self-employment or property income is below £90K only a single consolidated expense figure needs to be submitted alongside the income figures. This means getting your quarterly updates submitted to HMRC is super fast and super easy.
How Do I Digitally Link?
If you record your self-employment, UK property and/or foreign property income and expenses in a spreadsheet or accounting software that isn't compatible with Making Tax Digital, you can use bridging software like Easy MTD. Due for release in 2026, Easy MTD will allow you comply with MTD for Income Tax and VAT. It provides the functionality to digitally link necessary figures (quarterly updates for Income Tax, and the 9 VAT figures for VAT), and manually specify or copy-and-paste all other figures - although digitally linking them is possible too.
If you would like to find out more about Easy MTD, please use the contact form.