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The first official deadline for Making Tax Digital (MTD) for Income Tax is 7 August 2026.
By this point, if you are a sole trader or landlord earning over £50,000 a year, you must have registered and filed your first quarterly report to HMRC.
What is MTD?
HMRC introduced MTD in an attempt to modernise the tax system.
It requires taxpayers to keep digital records and use compliant software.
From April 2026, you should have been collecting digital records of your income and expenses to be sent off for the upcoming 7 August deadline.
You must submit these updates quarterly to HMRC, plus a final end-of-year tax return.
If you have a gross income of over £50,000 from either rental or self-employment income, you are obligated to comply with MTD in 2026.
HMRC will use your 2024/25 tax return to determine whether you are inside or outside of the regime.
It is important to note that these qualifying rates for MTD will fall to £30,000 in April 2027 and fall again to £20,000 in April 2028.
What you need to do
To prepare for MTD, eligible sole traders and landlords must make the shift from paper records to fully digital records, recording and submitting information through HMRC-recognised software.
If you continue to use spreadsheets, you will need to find a suitable bridging solution to connect to HMRC’s system.
You should calculate your gross qualifying income to see if you need to comply with the rules.
If you earn over the threshold, then you must formally register for the MTD service with HMRC using your Government Gateway User ID and password.
Software is important, so you must make the switch to MTD-compliant solutions to send your tax documents over to HMRC.
If the software you are using is not compliant, your documents may not be processed.
Having proper bookkeeping procedures in place will help with the frequency of the declarations.
What are the penalties if you miss the deadline?
HMRC has implemented a ‘soft landing’ period for MTD during the 2026/2027 tax year. This means that a late submission will not result in any penalty points for any missed quarterly updates in the first year.
However, you are still legally required to maintain digital records and make the submissions on time.
Missing deadlines can cause unnecessary stress and put you behind when the end-of-year declaration is due.
How we can help
If you have not already, you should consider appointing an accountant to support you with the changes to MTD.
Our expert team can help you stay compliant while handling all of the new obligations.
Get in touch today for advice on managing MTD before the deadline hits.