MTD Final Declaration vs Old Self Assessment Compared

One of the most common questions from UK taxpayers preparing for MTD is: ‘Does Making Tax Digital replace Self Assessment?’ The short answer is: partially. MTD ITSA replaces the way you report income and expenses throughout the year (quarterly submissions instead of annual), but you still need to file a Final Declaration at year-end that serves a similar purpose to the old Self Assessment return. This guide explains exactly what changes, what stays the same, and what the Final Declaration involves.

Written by ICAEW chartered accountants who have been filing Self Assessment returns for over 15 years and are now transitioning clients to the new MTD ITSA regime. For the broader MTD picture, see our complete small business MTD guide.

Self Assessment vs MTD ITSA: Side-by-Side Comparison

The key mental model: Think of MTD ITSA as Self Assessment broken into 5 pieces. Instead of reporting everything once in January, you report your income and expenses quarterly throughout the year, then confirm and finalise everything via the Final Declaration in January. The information reported is broadly the same. The timing and method change dramatically.

What Is the Final Declaration?

The Final Declaration is the year-end filing that replaces the traditional Self Assessment return under MTD ITSA. It is submitted after the end of the tax year and serves three purposes:

Purpose 1: Confirm Quarterly Data

Your 4 quarterly submissions throughout the year reported estimated income and expenses. The Final Declaration confirms these figures are correct or makes adjustments. If you estimated £3,000 in Q3 expenses but the actual figure was £3,200, the Final Declaration corrects this.

Purpose 2: Add Non-Quarterly Information

Certain tax-relevant items are not reported quarterly. The Final Declaration adds:

• Personal allowances and tax reliefs
• Gift Aid donations
• Pension contributions (personal and employer)
• Student loan repayments
• High Income Child Benefit Charge
• Capital gains (if applicable)
• Employment income (if also employed)
• Bank interest and dividend income
• Foreign income (if applicable)
• Marriage Allowance transfers

Purpose 3: Calculate Final Tax Position

The Final Declaration calculates your total Income Tax and National Insurance liability for the year, taking into account all income sources, reliefs, and allowances. It also calculates any payments on account due for the following year.

What stays the same: The Final Declaration deadline is 31 January following the end of the tax year, the same deadline as the old Self Assessment. Payment deadlines (31 January and 31 July) also remain unchanged. If you are used to the Self Assessment timetable, the year-end process feels broadly familiar.

What Quarterly Updates Contain (The New Part)

The genuinely new element of MTD ITSA is the quarterly submission. Each quarter, you submit a summary of your business income and expenses for that period via your MTD software.

Quarterly Update Content

Quarterly Deadlines (Tax Year Aligned)

For details on choosing between monthly and quarterly filing, and whether cash or accruals basis is better for your business, see our dedicated guides.

What Self Assessment Features Disappear Under MTD?

1. The SA100 Form

The traditional SA100 Self Assessment return form (and its supplementary pages SA103, SA105, etc.) is replaced by the quarterly submissions plus Final Declaration. You no longer fill in the SA100 form. Your MTD software handles the data formatting and submission.

2. HMRC Online Filing Portal (for MTD taxpayers)

You can no longer file via the HMRC Self Assessment online portal if you are within MTD ITSA. All submissions must go through MTD-compatible software. The HMRC portal remains available for taxpayers not yet within MTD (below the income threshold).

3. Paper Filing

Paper Self Assessment returns (SA100 by post) are no longer accepted for MTD taxpayers. All filing is digital via software. The only exception is for taxpayers with a formal digital exclusion exemption.

4. The Old Fixed Penalty System

The old Self Assessment penalties (£100 at 1 day late, £10 per day from 3 months, £300 or 5% at 6 months) are replaced by the new points-based penalty system. The new system is arguably harsher for persistent late filers but more forgiving for occasional one-off late submissions (because a single late submission earns a point, not an immediate £100 fine).

What Stays Exactly the Same Under MTD?

1. Tax Year Dates

The UK tax year remains 6 April to 5 April. MTD does not change tax year dates.

2. Year-End Deadline (31 January)

The Final Declaration deadline is 31 January following the end of the tax year. This is the same deadline that has applied to Self Assessment for decades. The 31 January deadline is deeply embedded in UK tax culture and HMRC has not changed it.

3. Payments on Account (31 January and 31 July)

The payment on account system remains unchanged. You still pay 50% of your estimated tax liability by 31 January and the remaining 50% by 31 July, with a balancing payment the following January if needed.

4. Personal Allowance and Tax Bands

Income Tax rates, thresholds, personal allowances, and National Insurance rates remain the same under MTD. MTD changes how you report, not how much tax you owe.

5. Allowable Expenses

The rules for what constitutes an allowable business expense are unchanged. The same expenses that were deductible under Self Assessment remain deductible under MTD ITSA. No new restrictions or additions.

6. Capital Allowances and Reliefs

Annual Investment Allowance, capital allowances on vehicles and equipment, and other reliefs continue to apply in exactly the same way. The Final Declaration captures these the same way the SA100 did.

The Transition Year: 2026/27

The first tax year under MTD ITSA for most taxpayers is 2026/27 (6 April 2026 to 5 April 2027). This creates a transition where:

• Your 2025/26 tax year (ending 5 April 2026) is filed via the old Self Assessment system (SA100, HMRC portal, 31 January 2027 deadline)
• Your 2026/27 tax year (starting 6 April 2026) is the first year under MTD ITSA (quarterly submissions from Q1, Final Declaration by 31 January 2028)

What This Means Practically

In early 2027, you will be doing two things simultaneously:

1. Filing your 2025/26 Self Assessment return by 31 January 2027 (the old system, for the last time)
2. Submitting your Q3 quarterly update for 2026/27 by 5 February 2027 (the new MTD system, for the first time mid-year)

Transition warning: January 2027 will be a busy month for taxpayers. You have both a final Self Assessment return and a quarterly MTD ITSA submission due almost simultaneously. Plan ahead. If you use an accountant, discuss the transition timeline with them well in advance.

5 Practical Differences You Will Notice

1. Software Is Now Mandatory

Under Self Assessment, you could use the free HMRC portal. Under MTD ITSA, you must use MTD-compatible accounting software. This is the biggest practical change. If you have been filing via HMRC’s website, you now need software. FreeAgent free via NatWest is the most cost-effective route.

2. You Engage With Your Finances More Often

Self Assessment allowed you to ignore your accounts for 11 months and panic-file in January. MTD ITSA requires quarterly engagement. This is initially more work but most business owners find it actually reduces year-end stress and gives them better visibility of their financial position throughout the year.

3. Your Tax Estimate Updates Quarterly

Under Self Assessment, you discovered your tax bill in January (often a shock). Under MTD ITSA, your software estimates your tax position after each quarterly submission. By Q3, you have a fairly accurate picture of your year-end liability. No more January surprises.

4. Record Keeping Standards Are Higher

Self Assessment accepted paper receipts, shoeboxes, and rough notes. MTD ITSA requires digital records with digital links. This means bank feeds, digital receipts, and automated data chains throughout your accounting process. The standard is measurably higher.

5. The Penalty System Is Different

The old £100 fixed penalty for 1-day-late Self Assessment is replaced by a points-based system. One late submission earns a point (no cash penalty initially). Four points trigger £200, then £200 per late submission thereafter. This is more forgiving for occasional one-off lateness but harsher for repeated lateness. Full breakdown in our penalties guide.

Who Still Files Traditional Self Assessment?

Not everyone moves to MTD ITSA immediately. Traditional Self Assessment continues for:

• Taxpayers with qualifying income below the MTD ITSA threshold (under £50,000 until April 2027, under £30,000 until April 2028)
• Employed individuals with no self-employment or property income
• PAYE taxpayers reporting via their employer
• Individuals with only investment income (dividends, bank interest)
• Taxpayers with a formal digital exclusion exemption

For details on thresholds and who qualifies, see our MTD qualifying income guide and MTD thresholds guide.

Case Study: First-Year Transition From Self Assessment to MTD ITSA

A self-employed marketing consultant based in the Edinburgh area had been filing Self Assessment via the HMRC online portal for 12 years. Earning approximately £72,000, she was well above the MTD ITSA threshold and needed to transition for the 2026/27 tax year. She had never used accounting software (all previous returns were prepared manually on the HMRC portal based on bank statements and a spreadsheet).

Her concerns:

• Had never used accounting software before
• Worried about filing quarterly (used to only thinking about tax once per year)
• Concerned about the cost of software and potential accountant fees
• Confused about the relationship between quarterly updates and the Final Declaration
• Living in Scotland, worried about SRIT (Scottish Rate of Income Tax) interaction

What we did:

3. Set up FreeAgent (free via her existing RBS account)
4. Connected RBS bank feed for automatic transaction import
5. Filed her final Self Assessment return for 2025/26 (31 January 2027)
6. Filed her first MTD ITSA quarterly submission for Q1 2026/27 (submitted 3 weeks early)
7. Explained that the Final Declaration in January 2028 would add her personal allowance, pension relief, and Scottish Rate adjustments
8. Identified £1,600 in previously unclaimed home office expenses (she worked from home 3 days per week)
9. Set up the weekly 15-minute reconciliation habit

Outcome: Seamless transition. Software cost: £0 (FreeAgent free with RBS). First quarterly submission took 25 minutes. By Q3, she described the quarterly process as ‘actually easier than I expected.’ She particularly valued the running tax estimate feature, which showed her by October that her year-end bill would be approximately £14,200, rather than discovering this as a shock in January. SRIT handled automatically by FreeAgent. Our fee: £110 per month covering all quarterly submissions and the Final Declaration. Previously, she spent approximately 8 hours preparing her own Self Assessment and often filed in the final week of January.

Final Declaration vs Self Assessment: FAQs

Does MTD replace Self Assessment?

Partially. The quarterly submission process replaces the annual reporting of income and expenses. The Final Declaration replaces the SA100 form. But the year-end deadline (31 January), payment dates, tax calculations, and allowable expenses remain the same.

What is the Final Declaration?

The year-end filing under MTD ITSA that confirms your quarterly data, adds personal tax information (allowances, reliefs, other income), and calculates your final tax liability. It replaces the traditional SA100 Self Assessment return.

When is the Final Declaration due?

31 January following the end of the tax year. Same deadline as the old Self Assessment return. For the 2026/27 tax year, the Final Declaration is due by 31 January 2028.

Do I still need to file Self Assessment under MTD?

If you are within MTD ITSA, the Final Declaration replaces Self Assessment. You do not file both. If you are below the MTD threshold, you continue with traditional Self Assessment until your income exceeds the threshold.

What is included in the Final Declaration that is not in quarterly updates?

Personal allowances, Gift Aid, pension contributions, student loan info, High Income Child Benefit Charge, capital gains, employment income, bank interest, dividends, foreign income, Marriage Allowance, and any adjustments to quarterly figures.

Are the payment deadlines changing under MTD?

No. Payments on account remain due on 31 January and 31 July. The balancing payment is still due on 31 January following the tax year. No change from Self Assessment payment timing.

Can I still use the HMRC online portal?

Not for MTD ITSA filing. You must use MTD-compatible software. The HMRC portal remains available for taxpayers below the MTD threshold who still file traditional Self Assessment.

Is the Final Declaration harder than Self Assessment?

In most cases, no. Your accounting software pre-populates the Final Declaration from your quarterly data. You mainly review and add personal items (pension contributions, Gift Aid, etc.). The quarterly submissions distribute the data entry work across the year.

What happens in the transition year (2026/27)?

You file your 2025/26 Self Assessment by 31 January 2027 (old system, last time). Your 2026/27 quarterly updates begin from Q1. In January 2027, you handle both a final SA return and a Q3 quarterly update nearly simultaneously.

Do quarterly updates affect my tax bill?

Quarterly updates do not trigger payments themselves. They update your estimated tax position but the actual payment dates remain 31 January and 31 July. Your software shows a running estimate after each quarterly submission.

What about Scottish taxpayers (SRIT)?

Scottish Rate of Income Tax is handled in the Final Declaration. Your quarterly submissions report income and expenses normally. The Scottish tax rates are applied when the Final Declaration calculates your tax liability. Major MTD software handles SRIT automatically.

Can my accountant file the Final Declaration for me?

Yes. Your accountant files the Final Declaration via the Agent Services Account, the same way they file quarterly submissions. Most MTD accountant packages include the Final Declaration in the monthly fee.

Is there a separate penalty for late Final Declaration?

Yes. A late Final Declaration triggers a penalty point in the same points-based system. The Final Declaration counts as one of your submission deadlines. Missing it earns a point towards the 4-point threshold.

What if I have employment income as well as self-employment?

Employment income (from PAYE) is not reported in quarterly updates. It is included in the Final Declaration alongside your self-employment and property income to calculate your total tax liability.

Will I still receive a tax calculation from HMRC?

Yes. After you submit the Final Declaration, HMRC processes the calculation and confirms your tax liability. Your software also calculates an estimate, but the HMRC figure is the binding one.

Need Help With the Transition? Free Consultation

Moving from Self Assessment to MTD ITSA is the biggest change to UK personal tax reporting in a generation. A 30-minute consultation with a chartered accountant who handles both Self Assessment and MTD filing every day ensures your transition is smooth, your first quarterly submission is correct, and your Final Declaration captures every allowance and relief you are entitled to.

At MTD – Making Tax Digital (part of B1 Accountants, ICAEW Reg Z10zyrJ):

• We handle both your final Self Assessment AND your first MTD ITSA submissions
• Transition planning included in onboarding
• Software setup with zero cost (FreeAgent free via NatWest/RBS/Mettle)
• Fixed monthly fees from £40 covering all quarterly submissions and Final Declaration
• Scottish Rate (SRIT) expertise for Edinburgh, Glasgow, and Aberdeen clients