What the MTD deadline extended headlines are actually about
Making Tax Digital for Income Tax has been formally pushed back three times since the original 2015 roadmap, and the total slippage is seven years. The first plan, published in December 2015, would have had self-employed subcontractors filing quarterly from 2018/19. Mandation actually began on 6 April 2026, and it began on time.
That gap is why the phrase still gets typed into search engines. This page sets out the deferrals that genuinely happened, the timetable as HMRC has it today, the one part of the programme that is still open-ended, and what a CIS subcontractor should do about it before the next phase lands.
The short history is worth knowing because it explains why so many people on site believe another delay is coming:
- December 2015. The Making Tax Digital roadmap proposed phasing in digital records and quarterly updates for Income Tax, VAT and Corporation Tax between 2018/19 and 2020/21.
- 13 July 2017. A Written Ministerial Statement pulled Income Tax out of the first wave. Mandation was pushed to April 2019 and limited to VAT.
- September 2021. The secondary legislation for MTD for Income Tax was laid, with a start date of April 2024.
- December 2022. The start was deferred again, to a phased rollout from April 2026 with a £50,000 threshold, followed by £30,000.
- 2025. A third phase was added rather than removed: a £20,000 threshold from April 2028.
Note the direction of travel in that last entry. The most recent change to the programme extended its reach downwards, it did not push the dates back. Roughly 780,000 sole traders and landlords were mandated from April 2026, with a further 970,000 joining from April 2027 on HMRC's own estimates.
The MTD ITSA timetable as it stands today
HMRC guidance updated on 26 March 2026 sets out three phases. Each is tied to a specific threshold and, importantly, to a specific historic tax return.
| You must start using MTD from | Qualifying income over | Tax year HMRC tests | Return that decides it |
|---|---|---|---|
| 6 April 2026 | £50,000 | 2024/25 | Filed by 31 January 2026 |
| 6 April 2027 | £30,000 | 2025/26 | Filed by 31 January 2027 |
| 6 April 2028 | £20,000 | 2026/27 | Filed by 31 January 2028 |
Nothing below £20,000 has been announced. A subcontractor with qualifying income of £20,000 or less is automatically outside the programme as it currently stands, with no application required.
The income figure HMRC tests is two years old, and for CIS it is gross
Two features of the threshold test cause most of the confusion among subcontractors, and they compound each other.
The first is timing. HMRC does not look at what you are earning when the phase starts. It looks at the Self Assessment return for the tax year two years earlier. Your 2025/26 return, the one due by 31 January 2027, is what decides whether you are mandated from 6 April 2027. A quiet current year does not keep you out, and a strong year two years ago will pull you in.
The second is the definition of qualifying income. It is your gross self-employment and property income added together, measured before expenses and before any CIS deduction your contractor has already handed to HMRC. A subcontractor invoicing £36,000 of labour and banking £28,800 after 20% is tested on the £36,000. The full detail of that trap, and how it interacts with materials, is covered in our guide to Making Tax Digital and CIS.
Put the two together and the practical instruction is simple. Pull out your last filed return, find the turnover box rather than your bank statements, and read the date off the table above. If you are unsure how much of your invoicing is labour versus materials, our guide to splitting labour and materials on CIS invoices covers the evidence HMRC expects.
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What was genuinely deferred, and what is now fixed for subcontractors
The useful distinction is between dates that have been settled and groups that are still waiting. Only one item in the second column is genuinely open.
| Status | What it covers |
|---|---|
| Fixed and live | Sole traders and landlords over £50,000, mandated since 6 April 2026 |
| Fixed, not yet started | Over £30,000 from 6 April 2027 and over £20,000 from 6 April 2028 |
| Genuinely still deferred | Partnerships. HMRC states they do not currently need to use MTD for Income Tax and that a timeline will follow later |
| Temporarily out, to April 2027 | Farmers and market gardeners claiming averaging relief, foster and kinship carers claiming qualifying care relief, those reporting trust or estate income, and those using the residence or remittance basis |
| Permanently out | Qualifying income of £20,000 or less, no National Insurance number before the tax year starts, trust and non-resident company returns, personal representatives, and Lloyd's underwriting members |
| Out on application | The digitally excluded, where age, disability, health, location or religious belief makes compatible software unreasonable |
The partnership position matters in construction more than in most sectors, because two-man and family partnerships are common among groundworkers, joiners and general builders. If you trade that way, you are not late for anything, and the existing partnership return process continues until HMRC publishes a date. Each partner should still check their own personal position, since separate sole-trade or rental income is tested individually.
The one easement left in 2026/27, and when it ends for CIS subbies
There is a real concession running right now, and it is much narrower than the word extension implies. HMRC has confirmed there are no penalties for missing a quarterly update deadline for the 2026 to 2027 tax year. That covers quarterly updates, in that year, and nothing else.
From 2027/28 the points-based system runs in full. Each missed quarterly update or return deadline earns one point, four points triggers a £200 penalty, and every subsequent missed deadline triggers another £200. Points below the threshold drop off 24 months after the deadline they relate to.
Late payment penalties were never inside the easement. The 2026/27 structure works on days after the due date:
| How late the payment is | 2026/27 position |
|---|---|
| Days 1 to 15 | No late payment penalty |
| Days 16 to 30 | Covered by the first-year grace, so no penalty in 2026/27 |
| Day 31 onwards | 3% of the tax outstanding at day 15, plus 3% of the tax outstanding at day 30, plus interest charged at an annualised 10% while the debt runs |
Two things change after this year. The grace period shortens from 30 days to 15, and the percentage steps up from 3% to 4% for 2027/28. A subcontractor who habitually settles their January balancing payment in mid-February gets away with it once and then does not.
To see where your balancing payment is likely to land once CIS deductions are credited, run your figures through our CIS Self Assessment calculator before the January deadline rather than after it.
What a CIS subcontractor should actually do this year
The behaviour that made sense during the delay years, waiting to see whether it would be postponed again, is now the expensive option. Five practical steps cover most subcontractors:
- Read your date off your own return. Take the turnover figure from your last filed Self Assessment, not your bank balance, and match it to the timetable table above.
- If your 2025/26 gross income exceeded £30,000, treat 6 April 2027 as fixed. That gives you the rest of this tax year to get software running properly, which is far easier than starting mid-quarter.
- Get the CIS statements into software as they arrive. Digital record-keeping is the part that cannot be caught up retrospectively, and monthly payment and deduction statements are your primary income evidence. Our CIS record-keeping guide sets out what HMRC expects to see.
- Check the software is on HMRC's recognised list for Income Tax specifically. Handling CIS well does not make a package MTD compliant, and the two capabilities are certified separately. Our comparison of CIS accounting software covers which packages handle both.
- Do not spend the easement. The absence of quarterly update penalties in 2026/27 is worth using to get your process right, not to defer setting one up.
One further point specific to construction. If you hold or are applying for Gross Payment Status, your filing record feeds the annual compliance test. Missed obligations under MTD are exactly the kind of thing that puts a GPS review in motion, and the April 2026 anti-fraud changes made losing GPS considerably harder to recover from.
The extension story is over. Three phases are dated, the first is live, the only genuinely open question is when partnerships join, and the single easement running expires on 5 April 2027. For a CIS subcontractor the practical work is unchanged from any other year: know your gross figure, keep the records digitally, and file on time.
If you want your MTD date confirmed against your actual filed figures and your CIS statements set up as compliant digital records before the £30,000 phase begins, see our services page or get in touch.