Making Tax Digital: what to do after the first quarterly deadline
August 2026 marked an important milestone for Making Tax Digital for Income Tax. More than 436,000 sole traders and landlords successfully sent their first quarterly update, and the first submission deadline passed on 7 August 2026.
If you were required to use MTD but did not submit on time, the message from HMRC is straightforward: do not ignore it. Bring your digital records up to date, connect the correct software and send the missing update as soon as possible.
Who currently needs to use MTD for Income Tax?
From 6 April 2026, MTD for Income Tax became mandatory for sole traders and landlords whose combined qualifying gross income from self-employment and property exceeded £50,000. Gross income means income before expenses are deducted.
The threshold looks at the total qualifying income across all relevant trades and property businesses. Someone with £30,000 of rental income and £25,000 of self-employed turnover could therefore be within the rules even though neither source exceeds £50,000 on its own.
From April 2027, the regime is due to extend to people with qualifying income over £30,000. This makes it sensible for businesses below the current threshold to improve their bookkeeping now rather than wait until the final months before mandation.
What happened in August?
For most taxpayers, the first quarterly period ran from 6 April to 5 July 2026 and the update was due by 7 August. The submission is a summary of income and expenses generated from the underlying digital records.
It is not a tax calculation and it does not replace the annual Self Assessment tax return.
Important: HMRC confirmed in August that no penalty points will be issued for late quarterly updates during the 2026/27 tax year.
This transitional protection is helpful, but it should not be treated as permission to postpone the work. Late tax-return and late-payment penalties continue to apply, and incomplete digital records can create a much larger problem at year end.
What should you do if the first update was missed?
If you missed the first quarterly update, the practical steps are:
- Check whether you were required to join MTD and whether an exemption applies.
- Sign up for MTD for Income Tax if this has not already been completed.
- Choose HMRC-recognised software and connect it to your HMRC account.
- Confirm that the correct trades, rental businesses and accounting periods are included.
- Create or import the digital income and expense records for the first quarter.
- Submit the outstanding quarterly update and prepare for the next deadline.
HMRC will start signing up some taxpayers
HMRC announced that, from September 2026, it will begin signing up customers who should be using MTD but have not yet joined. This will happen in stages.
Signing up proactively is generally preferable. It gives you time to check that HMRC holds the right details, select appropriate software and correct any problems before another quarterly deadline arrives.
Waiting for HMRC to act does not remove the underlying obligation.
Quarterly reporting does not replace good bookkeeping
A quarterly update may be a short submission, but it depends on complete digital records. Bank transactions, sales, expenses and property income need to be captured consistently.
Waiting until the deadline and attempting to reconstruct three months of activity increases the risk of omissions and incorrect categorisation.
The best approach is a monthly bookkeeping routine with a quarterly review. That also gives you more current information about profitability, cash flow and the likely tax position.
Need help with Making Tax Digital?
TJB Accountants can help you understand how these developments affect you and make sure the right records, registrations and filings are in place.
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Disclaimer: This article provides general information only and does not constitute advice tailored to your individual circumstances. Information is correct as at 31 August 2026.
