# HMRC Making Tax Digital Integration: A Guide for Businesses Source: https://dijituldevelopments.co.uk/guides/hmrc-making-tax-digital-integration/ Updated: 2026-10-10 > Making Tax Digital requires businesses to keep digital records and send VAT returns, and now Income Tax updates, to HMRC through compatible software using HMRC's MTD APIs. dijitul builds MTD integrations and bridging links between business systems and HMRC or accounting software, with a fixed-price quote after a free chat. ## Key facts - MTD for VAT has applied to all VAT-registered businesses since 1 April 2022 - MTD for Income Tax started on 6 April 2026 for sole traders and landlords with qualifying income over £50,000 - The threshold falls to £30,000 from 6 April 2027 and £20,000 from 6 April 2028 (GOV.UK) - Quarterly updates are cumulative and due on the 7th of August, November, February and May - HMRC will not apply penalty points for late quarterly updates in the 2026 to 2027 tax year - Software must send fraud prevention headers on MTD API calls, which is a legal requirement - HMRC API access uses OAuth 2.0; access tokens last 4 hours and authority must be re-granted after 18 months ## MTD in 2026: who it affects **MTD for VAT** applies to all VAT-registered businesses for VAT periods starting on or after 1 April 2022, whatever their turnover. VAT records must be kept digitally and returns filed through compatible software. **MTD for Income Tax** started on 6 April 2026. According to GOV.UK, it applies to sole traders and landlords registered for Self Assessment whose qualifying income (self-employment plus property income) exceeds a threshold based on an earlier tax year: - More than £50,000 in 2024 to 2025: from 6 April 2026 - More than £30,000 in 2025 to 2026: from 6 April 2027 - More than £20,000 in 2026 to 2027: from 6 April 2028 Limited companies do not use MTD for Income Tax. Check GOV.UK's eligibility guidance for exemptions and your own position, and speak to your accountant about tax treatment. ## Quarterly updates and deadlines People within MTD for Income Tax keep digital records of income and expenses and send quarterly updates. GOV.UK explains that each update is **cumulative**, covering the period from the start of the tax year to the end of the quarter, not just the latest three months. With standard periods (6 April to 5 April), deadlines are 7 August, 7 November, 7 February and 7 May. Calendar periods (starting 1 April) are also allowed with the same deadlines. A tax return is still submitted after the year end. Late quarterly updates attract penalty points, and four points bring a £200 penalty, but GOV.UK states HMRC will not apply penalty points for late quarterly updates during the 2026 to 2027 tax year. ## Digital records and digital links HMRC allows spreadsheets, as long as data moves from them to HMRC through compatible (bridging) software without manual retyping. GOV.UK lists acceptable digital links including linked cells, CSV or XML import and export, and API transfers. For businesses, this is where integrations matter: if sales come from a bespoke system, an ecommerce platform or a billing tool, figures should flow into the accounting or MTD software digitally. Copying totals by hand between systems breaks the digital link rules. ## What building an MTD API integration involves Most businesses meet MTD by using accounting software that already connects to HMRC, such as Xero, QuickBooks or Sage, and integrating their own systems with that. A direct HMRC integration makes sense for software products, agents and specialised systems. It involves: - **Registering** an application on the HMRC Developer Hub and subscribing to the relevant APIs (for example VAT (MTD), or the Income Tax MTD APIs). - **OAuth 2.0** user-restricted access: the taxpayer or agent grants authority, the access token lasts 4 hours and is refreshed with a single-use refresh token, and authority must be granted again after 18 months. - **Fraud prevention headers**: HMRC states that submitting this header data is required by law for the VAT (MTD) and Income Tax MTD APIs. The Gov-Client and Gov-Vendor headers describe the device, network and software, and HMRC provides a test API to validate them. - **Sandbox testing** with HMRC test users, covering obligations, submissions and error cases. - **Production approval**: HMRC reviews your testing before granting production credentials, so leave time for it. ## Practical steps for a business preparing for MTD - **Check your position.** Use GOV.UK's eligibility guidance for MTD for Income Tax, and confirm VAT returns already go through compatible software. - **Map where your figures come from.** Sales from a website, invoices from a billing system, expenses from receipt apps, rent from a letting system. Each source must reach your MTD software digitally. - **Find the manual steps.** Anywhere someone copies a total from one screen to another, or retypes a report into a spreadsheet, is a break in the digital link. - **Close the gaps.** Use the integrations your accounting software already offers, or build a custom link where none exists, using APIs or structured CSV imports. - **Agree categories with your accountant.** Income and expense categories in your records need to map cleanly to what MTD submissions require. - **Test a quarter early.** Run a trial quarter, compare totals with your existing records and fix differences before deadlines matter. - **Document the process.** Who reviews figures, who submits, and what to do if an integration fails close to a deadline. For software businesses building a direct HMRC integration, add time for HMRC's production approval and for testing fraud prevention headers thoroughly, because errors there can block your application. ## When to talk to dijitul dijitul builds the links that keep MTD records digital: posting sales, billing and ecommerce data into Xero, QuickBooks or Sage through their APIs, and direct HMRC MTD API integrations where a product needs one. We are software developers, not tax advisers, so we work alongside your accountant on the tax rules. Start with a free chat and get a fixed-price quote. See accounting software integration. ## FAQs ### Who has to use Making Tax Digital for Income Tax? According to GOV.UK, sole traders and landlords registered for Self Assessment with qualifying income over £50,000 from 6 April 2026, over £30,000 from 6 April 2027, and over £20,000 from 6 April 2028. Qualifying income is self-employment plus property income. Some exemptions apply. ### Can I still use spreadsheets under MTD? Yes. HMRC accepts spreadsheets if figures reach HMRC through compatible bridging software using digital links, such as linked cells, CSV import or API transfer, rather than retyping. dijitul can build digital links from business systems into accounting software. ### When are MTD Income Tax quarterly updates due? For standard periods, by 7 August, 7 November, 7 February and 7 May. GOV.UK explains each update is cumulative from the start of the tax year. HMRC will not apply penalty points for late quarterly updates in the 2026 to 2027 tax year. ### What are HMRC fraud prevention headers? They are Gov-Client and Gov-Vendor HTTP headers describing the user's device, network and the software making the request. HMRC says sending them is a legal requirement for the VAT (MTD) and Income Tax MTD APIs, and missing or wrong data can lead to action against the software provider. ### Do I need a direct HMRC integration? Most businesses do not: their accounting software files with HMRC, and they just need their other systems linked digitally to it. A direct HMRC MTD API integration suits software products, agents or specialist systems. dijitul can advise in a free chat. ## Pricing and contact Every project gets a fixed-price quote after a free initial chat and a short scoping stage. You own the code and the data. Book a free chat: https://dijituldevelopments.co.uk/contact/ · 01623 650333 · info@dijitul.uk