Making Tax Digital (MTD) for Income Tax became mandatory this year for sole traders and landlords with qualifying income over £50,000 and the first quarterly update deadline hits in August.
Meeting the deadline
The first quarterly update period runs from 6 April to 5 July 2026, with a submission deadline of 7 August 2026.
Some customers use calendar quarters instead, with the first period running from 1 April to 30 June, but the submission deadline is the same nevertheless.
Quarterly updates must be sent through HMRC-recognised compatible software. This does not replace your annual tax return, which is still due by the usual 31 January deadline.
What happens if the deadline is missed?
HMRC has confirmed a soft landing for the first year of MTD. No penalty points will be issued for late quarterly updates during the 2026/27 tax year and missing the 7 August deadline will not trigger an immediate fine.
However, it is still a legal requirement to meet the deadline and HMRC will record those who have done so.
In the final weeks before the first deadline, HMRC confirmed that around 400,000 taxpayers were still to register for MTD, so the levels of non-compliance are expected to be high.
The initial concessions run out in April 2027 when the points-based penalty system comes into effect.
Under this system, each missed quarterly deadline earns one penalty point. Once you reach four points, HMRC issues a fixed £200 penalty, with a further £200 charged for every subsequent late submission while you remain at the threshold.
Make sure you avoid late submissions
Late submissions should be avoided at all costs.
You must keep digital records and report them on time. Falling behind now makes the next update and your eventual tax return more challenging to prepare.
Building the habit of timely digital record keeping now will make the shift to the full penalty regime next year far less stressful.
If you have not yet submitted your first quarterly update or you are unsure whether MTD applies to you, our team can help you get on track.
Get in touch for support with MTD and your quarterly reporting obligations.