Introduced in a government announcement back in 2015, and rolled out in phases over the past 9 years, Making Tax Digital (MTD) for Income Tax is the new way for sole traders and landlords to report their income and expenses to HMRC.
On 7th August 2026, the first digital update was due to HMRC for the quarter running from 6th April to 5th July 2026.
This applies to sole traders and landlords, if their total annual income from self-employment and property is over £50,000.
What MTDs actually mean for businesses reporting to HMRC
For many businesses, those who have already kept digital records in compatible software throughout the quarter, submitting the update should be straightforward.
The Making Tax Digital system requests a summary of your income and expenses for that period. If your records have gaps or haven’t been kept digitally, now is the time to sort this out.
Did you miss the MTD deadline? Don’t worry!
For 2026/27, HMRC isn’t issuing penalty points for late quarterly submissions.
This means business have a grace period while everyone gets used to the new system, and no penalty points will be issued. Additionally, for late tax payments, there is a 30-day grace period in your first year before penalties kick in (which reduces to 15 days in subsequent years).
That’s not to say implementing this system “doesn’t matter”. You’ll still need to submit all four quarterly updates plus your year-end declaration, and building the habit now saves a scramble later when the soft landing ends.
Looking for further support with HMRC deadlines?
Make sure your bookkeeping is up to date for the full quarter, not just roughly right. Then, be sure to confirm your software is actually submitting to HMRC, instead of only storing records locally.
HMRC does not supply free software to complete this, so always navigate to trusted accounting and record-keeping software to track the likes of daily income and categorised expenses.
Alternatively, you can of course save yourself the hassle and stress by allowing us to do it for you.
Need a hand getting your MTD submission over the line?
We’re here before the deadline, not just after it. Contact us: 0800 999 1800, or send us an enquiry via our website.
