Making Tax Digital for Income Tax comes with its own vocabulary, and some of it has changed since the scheme was first designed. These definitions follow HMRC's guidance as at 27 September 2026, in alphabetical order.
A to D
- Adjustments
- Changes you make after your fourth quarterly update and before your tax return: taking out costs you cannot claim, claiming allowances and reliefs, accounting adjustments if you do not use the cash basis, and capital allowances.
- Agent services account
- The HMRC account an accountant or bookkeeper uses to act for clients. A client must authorise them before they can.
- Bridging software
- Software that connects to records you keep elsewhere, usually a spreadsheet, and sends your quarterly updates and tax return to HMRC.
- Business (or income source)
- What you send updates for. Each self-employed trade is a business. All your UK lettings are one UK property business. All your overseas lettings are one foreign property business.
- Calendar update periods
- An alternative to the standard periods, running from 1 April to 30 June, 30 September, 31 December and 31 March, with the same deadlines. Useful if your accounts run to 31 March. You choose them in your software before your first update of the year.
- Cash basis
- Recording income when you receive it and expenses when you pay them. It has been the default for sole traders since 6 April 2024 and is also the usual basis for individual landlords; you can choose traditional accounting instead.
- Compatible software
- Software that can create or link to your digital records, send quarterly updates and submit your tax return. HMRC does not provide any.
- Cumulative updates
- Each quarterly update covers the tax year so far, from 6 April (or 1 April on calendar periods), not just the latest three months. Corrections flow into the next update.
- Digital records
- A record of each item of self-employment or property income or expense, kept in compatible software, with the amount, the date and the category.
- Digital links
- How records move between products: linked cells, CSV or XML import and export, an API, or similar. Retyping or copying and pasting a record into other software is not allowed.
- Digitally excluded
- When it is not reasonable for you to use software, for example because of age, health, disability, religious belief or no internet access where you live or work. You can apply for an exemption.
E to O
- End of period statement (EOPS)
- A year-end statement for each business in earlier designs of Making Tax Digital. HMRC's current guidance has no such step.
- Exemption
- Being excused from Making Tax Digital. Some exemptions are automatic, such as qualifying income of £20,000 or less; others you apply for. Exempt people still send a Self Assessment return.
- Final declaration
- The name commonly used for the year-end tax return under Making Tax Digital. HMRC's guidance now calls it your tax return.
- HMRC online services
- Your HMRC account, signed into with your Self Assessment details, where you sign up, see your deadlines and manage agents.
- Jointly let property
- Property you let with someone else. You record only your share, and HMRC allows simpler records and leaving expenses out of quarterly updates until the year end.
- Main agent and supporting agent
- A client has one main agent, who can do almost everything the client can, including submitting the tax return, and any number of supporting agents, who can send quarterly updates but not the tax return.
- Nil update
- A quarterly update for a period with no income or expenses. You still have to send it.
- Opting out
- Leaving Making Tax Digital, possible once your qualifying income has been below the threshold for three tax years in a row, or after amending the previous year's return takes you below.
P to Z
- Penalty points
- The late submission system: one point per missed deadline, and a financial penalty at the points threshold. For 2026/27, HMRC does not give points for late quarterly updates, but a late tax return still earns one.
- Qualifying income
- Self-employment and property income before expenses, the figure that decides whether you need Making Tax Digital. See what counts.
- Quarterly update
- A summary of your income and expense totals by category, sent for each business by 7 August, 7 November, 7 February and 7 May. Not a tax return and not a bill.
- Simpler categorisation
- Recording income and expenses in less detail, allowed for a business whose turnover is under £90,000. Residential landlords must still separate residential finance costs.
- Software finder
- HMRC's tool listing software that has been through its process, filterable by income source and accounting period.
- Standard update periods
- The default quarters, following the tax year: to 5 July, 5 October, 5 January and 5 April.
- Tax return
- The annual return you still submit, through your Making Tax Digital software, by 31 January after the tax year, including all your other income. See our final declaration guide.
- Thresholds
- Qualifying income over £50,000 on the 2024/25 return means joining from 6 April 2026; over £30,000 on 2025/26, from 6 April 2027; over £20,000 on 2026/27, from 6 April 2028.
- Volunteering
- Signing up before you have to. Volunteers do not get penalty points for late quarterly updates, but do for a late tax return.
VoxaMTD sends quarterly updates for self-employment and UK property income and submits the tax return, directly to HMRC's live Making Tax Digital service, and filing is free. It is not yet listed on HMRC's published software finder. Start free, no card needed.
Definitions are simplified from HMRC's published guidance as at 27 September 2026. This is general information, not tax advice.