The HMRC January 2026 Deadline: 5 Critical Things You Must Do Now To Avoid Penalties And Prepare For MTD
The 31 January 2026 deadline is fast approaching, marking the final date for millions of UK taxpayers to submit their online Self Assessment (SA) tax return and pay any tax owed for the 2024 to 2025 tax year. This annual deadline is non-negotiable, and the penalties for late filing or payment are strict, making early preparation essential. As of today, December 20, 2025, HMRC is actively reminding taxpayers to file early, especially as this deadline precedes one of the most significant changes to the UK tax system in a generation: the rollout of Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) in April 2026.
This article provides an urgent, up-to-date guide on the January 2026 requirements, outlining the exact steps you need to take now to comply with the current system while also preparing for the mandatory digital reporting that will begin just weeks later. Failing to meet this deadline will incur an immediate £100 penalty, so understanding your obligations is crucial.
Your Essential Checklist for the 31 January 2026 Self Assessment Deadline
The January 2026 deadline pertains to your tax affairs for the period from 6 April 2024 to 5 April 2025. This is a crucial date for sole traders, landlords, those with significant investment income, and anyone else who receives a ‘Notice to File’ from HMRC. The deadline requires two key actions: filing your return and paying your bill.
1. File Your 2024/25 Online Tax Return (The Final Deadline)
The absolute latest date for HMRC to receive your completed online Self Assessment tax return for the 2024/2025 tax year is 31 January 2026. While the paper return deadline has already passed, the online submission offers more flexibility and is the standard method for most taxpayers. You should have already registered for Self Assessment if you meet the criteria, such as having self-employed income over £1,000 or rental income.
Key Entities for Filing:
- Sole Traders and Freelancers
- Individuals with rental property income (Landlords)
- Partners in a business partnership
- Those with untaxed income from savings, investments, or dividends
- Individuals claiming Child Benefit who have income over £50,000 (High Income Child Benefit Charge)
2. Pay Your Tax Bill (Payment on Account)
31 January 2026 is also the deadline for paying any tax you owe for the 2024/2025 tax year. Furthermore, it is the due date for your first ‘Payment on Account’ for the 2025/2026 tax year. This system helps spread the cost of your tax bill, with the second Payment on Account due on 31 July 2026.
If you are struggling to pay, HMRC has a 'Time to Pay' arrangement. However, you must contact them as soon as possible, ideally before the deadline, to discuss setting up a payment plan. Acting early is critical, as interest is charged on late payments.
3. Understand the Strict Penalty Regime
HMRC operates a clear and immediate penalty structure for late filing and late payment. This system is designed to encourage timely compliance and is rarely waived unless you have a legitimate "reasonable excuse."
- Late Filing Penalty: An immediate £100 penalty is charged if your return is one day late. Further penalties accrue after three months (£10 per day for a maximum of 90 days), six months (the greater of £300 or 5% of the tax due), and twelve months (another £300 or 5% of the tax due).
- Late Payment Penalty: Interest is charged from the day after the deadline. Penalties are added at 30 days, six months, and twelve months late, each typically 5% of the unpaid tax.
The Looming Digital Revolution: Preparing for MTD for ITSA in April 2026
While the January 2026 deadline is a traditional one, it serves as the final annual return before the major shift to Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) begins. This is the most significant change impacting sole traders and landlords, and the January 2026 filing is the last under the old system for many.
Who is Affected by the MTD ITSA 2026 Rollout?
The start date for mandatory MTD for ITSA compliance is 6 April 2026. This new system will initially apply to a specific group of taxpayers.
- Sole Traders and Landlords: Individuals with a gross income from their trading and/or property that exceeds £50,000 in the previous tax year (i.e., the 2024/25 tax year, which you are filing for by January 2026).
A second wave of taxpayers—those with gross income between £30,000 and £50,000—will follow one year later, starting in April 2027.
The New MTD ITSA Requirements (Post-January 2026)
For those falling into the £50,000+ threshold, the MTD system fundamentally replaces the single annual tax return with a series of digital submissions.
4. Quarterly Digital Updates: Instead of one annual submission, taxpayers must keep digital records and submit summary figures of their income and expenditure to HMRC every quarter using MTD-compatible software. This provides HMRC with near-real-time data.
5. Annual Final Declaration: The annual Self Assessment tax return will be replaced by a final declaration, which must be submitted by 31 January following the end of the tax year (e.g., the final declaration for the 2026/27 tax year will be due 31 January 2028). This declaration will finalise the tax position, incorporate any other income, and account for any claims or allowances.
Key Entities and LSI Keywords for Tax Compliance
To ensure full topical authority and cover all angles of the January 2026 deadline and the subsequent MTD changes, it is important to be familiar with the following related entities and terms:
- HMRC (His Majesty's Revenue and Customs): The UK's tax authority.
- Self Assessment (SA): The system used to declare and pay income tax.
- Making Tax Digital (MTD): The government programme to modernise the tax system.
- MTD for ITSA (Income Tax Self Assessment): The digital reporting requirement for sole traders and landlords.
- Tax Year 2024/2025: The period covered by the 31 January 2026 deadline.
- Gross Income Threshold: The £50,000 level that triggers mandatory MTD for ITSA compliance in 2026.
- Quarterly Updates: The new mandatory reporting frequency under MTD.
- Final Declaration: The MTD replacement for the annual tax return.
- Payment on Account: Advance payments toward the next year's tax bill.
- Tax Software: MTD-compatible accounting software required for digital reporting.
- Landlords and Sole Traders: The primary groups affected by the MTD ITSA changes.
- Penalties and Interest: The financial consequences for non-compliance.
- Tax Agent / Accountant: Professionals who can manage the filing process.
- Time to Pay (TTP): HMRC's option for taxpayers who cannot pay their bill on time.
- Capital Gains Tax (CGT): Often reported alongside Self Assessment.
- National Insurance Contributions (NIC): Paid by the self-employed via Self Assessment.
- Personal Allowance: The amount of income you can earn without paying tax.
Actionable Steps to Take Before the Deadline
The pressure of the January 2026 deadline is compounded by the need to prepare for MTD, making this a pivotal year for many taxpayers. Here are the immediate steps you should take:
For the January 2026 Deadline:
- Gather All Documents: Collect all relevant financial records for the 2024/2025 tax year, including P60s, bank interest statements, dividend vouchers, and records of business expenses.
- Register Your Government Gateway: Ensure your Government Gateway ID and password are correct and up-to-date to avoid last-minute access issues.
- File and Calculate Early: Submit your return well before 31 January. This gives you time to calculate your tax bill and arrange payment or a Time to Pay agreement if necessary.
For the April 2026 MTD ITSA Change:
- Check Your Income: Review your 2024/25 gross income to determine if you are above the £50,000 threshold. If you are, you must comply with MTD from April 2026.
- Choose MTD Software: Start researching and selecting MTD-compatible accounting software now. Familiarising yourself with the software is the biggest hurdle to the new system.
- Speak to Your Accountant: Consult with your tax agent about the transition. They can advise on the best software and help restructure your bookkeeping processes to be MTD-ready.
The 31 January 2026 deadline is more than just an annual chore; it is the final milestone before the UK tax system shifts into a new digital era. By meeting this deadline on time, you secure compliance for the past year and gain the necessary clarity to prepare for the MTD for ITSA requirements that will begin just two months later. Don't delay—your preparation now will save you significant penalties and stress in the future.
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