Making Tax Digital: First Quarterly Update Due 7 August

Who must file and by when

The first hard deadline of the Making Tax Digital for Income Tax era arrives on 7 August 2026. Anyone within the regime must submit a quarterly update covering the period from 6 April to 5 July 2026 by that date, through MTD-compatible software rather than any HMRC online form. The regime has applied since 6 April 2026 to sole traders and landlords whose qualifying income, meaning combined gross income from self-employment and property before expenses, exceeded £50,000 in the 2024-25 tax year. HMRC wrote to affected taxpayers ahead of April, but the qualifying test catches people who do not think of themselves as businesses: a full-time employee with a portfolio of rental properties, or a contractor whose turnover crossed the line two years ago, is inside the regime even if their profit is modest, because the test is gross income, not profit. Those who elected calendar quarters instead of tax-year quarters report 1 April to 30 June, with the same 7 August deadline. The threshold falls to £30,000 from April 2027 and £20,000 from April 2028, so each year pulls a new tranche of smaller traders and landlords into the same quarterly rhythm this first cohort is establishing now.

What a quarterly update actually is

The update is deliberately lighter than its reputation. It is a summary of business income and expenses for the quarter, generated from the digital records the regime requires and transmitted by the software: totals by category, not transaction lists, invoices or receipts. It is not a tax return, requires no accuracy declaration of the kind that accompanies the final return, and no tax payment falls due with it. Updates are cumulative, so each submission reports the year to date, which means an error in the first quarter is simply corrected in the figures of the second rather than through any amendment process. The real obligations sit underneath: transactions must be recorded digitally in software or spreadsheets linked to software, and the end-of-year process still requires a final declaration by 31 January following the tax year, where accounting adjustments, reliefs and other income come together, replacing the Self Assessment return for those in the regime. Payment dates are untouched: the 31 January balancing payment and payments on account run exactly as before. The quarterly update, in short, changes when HMRC sees the numbers, not when money is owed.

Penalties: how the points system works

Late quarterly updates fall under the points-based penalty system rather than immediate fines. Each missed deadline earns one penalty point, and a £200 penalty is charged only when the points reach the threshold, which is four for quarterly filers. Points expire after two years of good behaviour once below the threshold, and after reaching it, a full compliance period of twelve months of on-time submissions resets the count. The design means a single late first update costs nothing in cash, which HMRC presents as proportionate but which advisers warn breeds a dangerous complacency: the points accumulate quietly, and a filer who treats every quarter casually reaches the £200 penalty within the first year and stays exposed for every late quarter thereafter. Separate and sharper penalties continue to apply to the final declaration and to late payment, where interest, currently charged at a rate linked to base rate, runs from the due date. The practical read for the first cohort is that 7 August is a free-ish deadline in cash terms but the habit-forming one: the systems, software connections and record discipline set up for this quarter are the ones that carry the next four years.

Getting ready in the final week

For those not yet set up, the week ahead is enough if approached in order. First, confirm you are actually in the regime by checking qualifying income for 2024-25 against the £50,000 test, and check the exemptions, which include those who are digitally excluded, with an application route through HMRC. Second, choose and connect software: HMRC publishes a list of MTD-compatible products, ranging from full accounting packages to bridging tools that link existing spreadsheets, and authorisation of the software against your HMRC account can take time, so it should not be left to deadline day. Third, get the quarter's records into digital form; the requirement is digital records from 6 April, so a shoebox quarter needs entering now, and bank statement imports make this faster than most expect. Fourth, submit early and treat the first pass as a systems test, since software authorisation failures and agent authorisation queues are the predictable failure points of any first filing season. Landlords and traders with an accountant should confirm who is filing, because the agent authorisation process for MTD is separate from existing Self Assessment authority and has caught out firms assuming continuity. HMRC's guidance and software list are linked in the sources below. Related: our money guides, bills section, comparison guides and the latest UK news.

Frequently asked questions

When is the first Making Tax Digital quarterly update due?

By 7 August 2026, covering the quarter from 6 April to 5 July 2026, or 1 April to 30 June for those who elected calendar quarters.

Who has to follow Making Tax Digital for Income Tax?

Sole traders and landlords whose combined gross income from self-employment and property exceeded £50,000 in 2024-25. The threshold falls to £30,000 from April 2027 and £20,000 from April 2028.

Do I pay tax with a quarterly update?

No. The update is a summary of income and expenses only. Payment deadlines, including the 31 January balancing payment and payments on account, are unchanged.

What happens if I miss the 7 August deadline?

You receive one penalty point. A £200 penalty applies only once you reach four points for quarterly submissions, but points accumulate across late quarters and reset only after sustained on-time filing.

Can I still use a spreadsheet under Making Tax Digital?

Yes, if it links to HMRC through bridging software that submits the figures digitally. Fully manual records no longer satisfy the digital record-keeping requirement.