Since MTD ITSA became mandatory in April 2026, AccTek has heard the same misconceptions again and again from new clients. Most stem from unclear HMRC communications, misread social media posts, or conflation with VAT returns. Here are the eight myths we correct most often — and the accurate picture for each.
Myth 1: MTD Means Paying Tax Four Times a Year
The myth: “Making Tax Digital means I have to pay my tax bill four times a year.”
The fact: This is the single most common MTD misconception and it is completely wrong. Quarterly updates are reporting submissions only — they tell HMRC what your income and expenses have been. They are not payment events.
Your actual tax payment date remains 31 January, exactly as under Self Assessment. Payments on account (if applicable) continue unchanged at 31 January and 31 July. What changes is how often you report — not how often you pay.
Full explanation: How quarterly updates work under MTD ITSA →
Myth 2: MTD Only Affects Landlords
The myth: “MTD is just for landlords — it doesn’t affect me as a self-employed person.”
The fact: MTD ITSA applies to anyone who files a Self Assessment return with qualifying income above the threshold — including sole traders, freelancers, consultants, tradespeople, and anyone with self-employment income, not just landlords.
Crucially, your qualifying income is the combined total of self-employment turnover and gross rental income. A freelance designer with £38,000 in fees and a buy-to-let generating £14,000 in rent has £52,000 in qualifying income and is caught by Phase 1 — even though neither source alone exceeds £50,000.
Check your position: Who needs to comply with MTD ITSA →
Myth 3: A Spreadsheet is Fine for MTD
The myth: “I already keep records in Excel — that’s compliant for MTD.”
The fact: A plain Excel or Google Sheets spreadsheet is not MTD-compliant on its own. The legal requirement is that records must be submitted to HMRC digitally via an approved API connection — and Excel has no such connection by default.
To use a spreadsheet for MTD, you must connect it to HMRC-approved bridging software that translates your spreadsheet data and sends it to HMRC via the MTD API. This adds cost and complexity. Most AccTek clients use Xero, which is included in all plans and connects directly to HMRC.
Full details: MTD software requirements → and Can landlords use spreadsheets for MTD? →
Myth 4: MTD Applies to Limited Companies
The myth: “My limited company will need to do MTD submissions too.”
The fact: MTD ITSA is a personal income tax obligation. It does not apply to limited companies at all. Limited companies file Corporation Tax returns on a separate schedule — and there is currently no confirmed start date for MTD for Corporation Tax.
What causes confusion is that a company director may still personally file Self Assessment — for example, on dividend income or rental income received personally. If that personal income exceeds the MTD threshold, the individual is subject to MTD ITSA. The company itself is unaffected.
AccTek serves both sole traders and company directors — get a quote to clarify your exact position →
Myth 5: You Get an Immediate £100 Fine for Missing a Deadline
The myth: “If I miss one MTD deadline, I’ll immediately get a £100 fine.”
The fact: The old Self Assessment penalty system — where a single day’s lateness triggered an immediate £100 fine — does not apply to MTD ITSA. HMRC has introduced a new points-based system specifically for MTD.
Under the new system, missing one quarterly deadline earns you one penalty point — but no financial penalty. A £200 financial penalty only triggers when you reach four penalty points, which for quarterly filers equates to approximately one full year of consistent non-compliance.
Full explanation: MTD ITSA penalties and the points system →
Myth 6: The £50,000 Threshold Is Based on Profit
The myth: “The £50,000 threshold is based on my profit after expenses — I’m below it.”
The fact: The threshold is based on gross income before expenses, not taxable profit. This catches a significant number of people who believe they are safely below the limit.
A landlord receiving £54,000 in rent but spending £18,000 on mortgage interest, repairs, and management fees has a profit of £36,000 — but is still above the Phase 1 threshold because the gross rental income of £54,000 exceeds £50,000. Similarly, a sole trader with £52,000 in fees who claims £15,000 in expenses has £52,000 in qualifying income for threshold purposes.
Full guide with worked examples: What income counts toward the £50k threshold →
Myth 7: You Can File Through HMRC’s Website
The myth: “I can just submit my MTD updates directly through HMRC’s own website.”
The fact: You cannot file MTD ITSA submissions through HMRC’s website directly. Unlike the old Self Assessment portal, HMRC has deliberately built MTD ITSA as an API-only system — every submission must go through HMRC-approved third-party software.
This is intentional: HMRC wants to remove manual data entry entirely and have software handle the data transfer. There is no HMRC web form equivalent for MTD quarterly updates. You must use approved software such as Xero, QuickBooks, FreeAgent, or Sage — or engage AccTek who manages this on your behalf.
Compare approved software options →
Myth 8: MTD Is Too Complicated Without Expensive Help
The myth: “MTD is so complicated I’ll need expensive specialist help to manage it.”
The fact: MTD ITSA is more frequent than Self Assessment but not inherently more complicated. For a straightforward landlord or sole trader, quarterly submissions are a summary of income and expenses — not a complex tax calculation. If your records are kept up to date in cloud software throughout the year, each submission takes minutes.
What AccTek offers is not complexity management — it is complete delegation. You connect your bank; we handle the software configuration, HMRC registration, quarterly submissions, and year-end Final Declaration. The cost is £19.99/month — a fixed fee regardless of how many submissions are due.
See everything AccTek does for you →
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