What a quarterly update involves, the deadlines left in the 2026-27 tax year, how penalties work, and who comes into scope in 2027 and 2028.
Making Tax Digital for Income Tax is how HMRC now collects income and expense figures from sole traders and landlords whose qualifying income from self-employment and property is over £50,000. It became mandatory in April 2026. Since then, people in that group keep digital records and send HMRC a short summary every three months through recognised software, and they still file an annual tax return. The first of those quarterly updates was due by 7 August 2026.
The deadline prompted a reminder from HMRC in late July. It said more than 864,000 sole traders and landlords were in scope, with about two weeks left to send that first update. Its Director of Making Tax Digital, Craig Ogilvie, called it “a landmark moment for the tax system”, adding that “hundreds of thousands of sole traders and landlords are now keeping digital records”. Further down this page you will find who is affected and what an update involves. It also covers how the deadlines fall, what happens if you are late and the lower thresholds coming in 2027 and 2028.
Who has to use it now
The rule is set by income. If you are a sole trader or landlord with qualifying income over £50,000 from self-employment and property, the scheme has applied to you since April 2026. HMRC’s announcement on GOV.UK describes Making Tax Digital as a legal requirement. You cannot opt in later at your own pace.
Plenty of people in scope had not acted as the deadline approached. SME Magazine reported a LinkedIn post by Ogilvie saying that in mid-July around 435,000 of the 864,000 people required to register had done so. More than half still needed to sign up at that point. If you are one of them, you have a lot of company.
There are exemptions, including one for people who are digitally excluded. HMRC’s announcement does not set out who qualifies. If you think an exemption might apply to you, check the detail on GOV.UK or with your accountant before assuming you are outside the scheme.
What a quarterly update involves
The name makes it sound heavier than it is. A quarterly update is a short summary of your income and expenses for the three months just gone, sent directly to HMRC through recognised software. It is not a tax return, and HMRC says it takes minutes to complete.
Some software includes a digital support tool called HMRC Assist. It gives tailored feedback to help you spot possible errors before you submit, though you remain responsible for the accuracy of what you send. After each update you can see an estimate of your tax bill. HMRC has not said how that estimate is worked out, so use it as a guide to what is coming. It is not a final figure.
HMRC’s own case study is Natasha Patterson, a 33-year-old full-time potter in Whitehead, County Antrim. She has worked as a potter since 2020 and opened her studio shop, Natasha Swan Ceramics, in 2023. She sent her first update weeks before the deadline, partly because she expected problems. “I was expecting there to be some hurdles and I wanted to give myself time to work through any issues but was pleasantly surprised to find the process very smooth and straightforward,” she said. The submission took about ten minutes.
What she valued most was the early sight of her tax bill. “It’s great to have a forecast of what I owe already, without mounds of paperwork,” she said, and she felt more confident going into the second quarter. Her comparison with the annual return was blunt: “If you can complete your Self Assessment tax return, this is much easier.” She used Starling Bank’s MTD-compatible software. HMRC’s notes to editors, published on Mynewsdesk, say the case study was sourced with Starling Bank’s help. It is one person’s experience, chosen by HMRC with a software provider, so treat it as an example of a smooth submission. Your first one may take longer while you learn the software.
The quarterly deadlines through the year
Each standard quarter ends on the 5th of a month, and the update for it is due on the 7th of the month after next. For the 2026-27 tax year, that works out as follows:
- 6 April to 5 July 2026: due 7 August 2026
- 6 July to 5 October 2026: due 7 November 2026
- 6 October 2026 to 5 January 2027: due 7 February 2027
- 6 January to 5 April 2027: due 7 May 2027
Some people can use calendar update periods instead, with the first running from 1 April to 30 June. The 7 August deadline was the same for everyone, whichever periods they used.
The quarterly updates sit alongside your tax return and do not replace it. The return deadline remains 31 January, so for this first year you still need to file and pay any tax owed by 31 January 2027. In practice that means five submissions a year: four short updates and one return.
Signing up and choosing software
You have to register on GOV.UK before you can send an update. If an accountant or agent already acts for you, they can sign you up. GOV.UK also holds the list of HMRC-recognised compatible software, along with free guidance and webinars. Ogilvie’s message to anyone not yet registered was direct: “If you haven’t signed up yet, there is still time – visit GOV.UK and search ‘Making Tax Digital for Income Tax’ to get started.”
HMRC’s own advice to people in scope comes down to confirming you are signed up (or that your agent has done it for you), making sure your software is compatible, and sending each update before its deadline. A spreadsheet or bookkeeping app you have used for years may or may not qualify, and you won’t know until you have looked at the list. HMRC’s announcement does not give software prices, so compare a few against the way you actually keep your books before you commit.
If you missed 7 August because you hadn’t registered, our view is simple: register now, send that first update anyway, then carry on with the November one. HMRC hasn’t said exactly what happens to late first-year updates beyond the absence of penalty points. Getting your records into the system now is still far easier than catching up on several quarters at once.
What happens if you miss a deadline
During the first year of MTD for Income Tax, HMRC will not issue penalty points for late quarterly updates. Penalties still apply as normal for a late Self Assessment return and for late payment, so the January return carries the same weight it always has.
From the second year, a points system starts. Each missed quarterly deadline earns one point, and once you reach four points you are charged a £200 fixed penalty. Points expire after a period of compliance, though HMRC has not said how long that period is. With four deadlines a year, a business that runs late every quarter could reach the £200 penalty within a single year.
That is what this first year is for. Use it to get your records digital, settle on software and build the quarterly habit, while a late update costs you nothing in points. Leaving it until the system has teeth is the harder route.
If you earn less than £50,000
The threshold is coming down in two steps. From April 2027, Making Tax Digital for Income Tax extends to sole traders and landlords earning more than £30,000. From April 2028, it reaches those earning more than £20,000. A lot of self-employed trades and professionals who are outside the scheme today will be inside it within two years.
If that includes you, there is no need to wait for a letter. The same first-year lesson applies to you on a later timetable. Moving your bookkeeping into digital records ahead of your start date, and talking to your accountant about which software suits your work, means your first quarter is routine instead of a rush to learn new software and register at the same time.
This is also where a recommendation counts. Most people choose an accountant or bookkeeper because someone they trust has used them. Each FindaBiz group holds one seat per trade, so the accountant in the room receives the referrals for that work. Their reputation with the group depends on looking after the people they are introduced to, because the person who made the introduction will be sitting across the table at the next meeting.
If you run a business and want to see how that works, come along as a guest first to see how a meeting runs and who is in the room. Your first visit is free. If you would like a look at FindaBiz before committing to a morning, our free online networking runs every Friday and is open to anyone with a free account. If you are looking for an accountant or bookkeeper to help with your quarterly updates and not a seat, the members in our groups are personally recommended by the people who sit alongside them.
Want to meet an accountant or bookkeeper in person? Find a FindaBiz networking group near you.
