The way sole traders and landlords report income to HMRC is going through its biggest change in decades. Making Tax Digital for Income Tax started in April 2026, and the first real test is almost here: the first quarterly update is due by 7 August 2026.
If that date is news to you, you are not alone, and there is still time to get sorted. Here is what the deadline means, who it applies to, and what you need in place, explained in plain English.
The first Making Tax Digital deadline: 7 August 2026
Do not panic, but do not ignore it either. HMRC has confirmed that late quarterly updates will not attract penalty points during the 2026-27 year, while everyone adjusts to the new system. Because updates are cumulative, a late or imperfect first quarter can be put right in the next one.
The first of these quarterly updates covers 6 April to 5 July 2026, and it must be with HMRC by 7 August 2026. It is a summary of the totals from your digital records, not a full tax return, so it does not need to be perfect. But it does need to be sent, and it needs to come from compatible software, not typed into a form.
Every Making Tax Digital deadline for 2026-27
The quarterly pattern repeats through the year, always due by the 7th of the month following each quarter end. Your tax is then finalised once a year, as now:
| Update | Period covered | Deadline |
| Quarter 1 | 6 April to 5 July 2026 | 7 August 2026 |
| Quarter 2 | 6 July to 5 October 2026 | 7 November 2026 |
| Quarter 3 | 6 October 2026 to 5 January 2027 | 7 February 2027 |
| Quarter 4 | 6 January to 5 April 2027 | 7 May 2027 |
| Final declaration | Full 2026-27 tax year | 31 January 2028 |
Two reassuring details. The updates are cumulative, meaning each one includes everything reported so far, so a mistake in one quarter can simply be corrected in the next. And your tax payment dates have not changed: payments are still due 31 January and, for many, 31 July.
Does Making Tax Digital apply to you?
You are in the first wave, from April 2026, if your qualifying income was more than £50,000. Qualifying income means your combined gross income from self-employment and property, before any expenses are deducted.
The word combined matters. A builder with £35,000 of trade income and £20,000 of rent is over the threshold, even though neither activity is over £50,000 on its own. It is turnover that counts, not profit, so you can be within the rules even in a year when you made very little.
If you are under the threshold now, it is still worth checking if and when you will need to use Making Tax Digital, because the bar keeps dropping:
From April 2027, the threshold falls to £30,000, and from April 2028 to £20,000. Most established tradespeople and landlords will be inside the system within the next two years.
What you need in place before the deadline
- Sign up for Making Tax Digital with HMRC. Being over the threshold does not enrol you automatically in all cases. There is a sign-up process, with eligibility checks, and your software needs to be linked to your HMRC account.
- Get compatible software running. This can be a full bookkeeping package such as Xero, or a compliant spreadsheet with bridging software. HMRC’s guidance on choosing the right software explains the options. Either way, every transaction needs to be recorded digitally. Photographing receipts as you go is far easier than reconstructing a quarter from a carrier bag of paperwork.
- Authorise your accountant. If an accountant or bookkeeper files for you, they need a specific digital authorisation from HMRC for Making Tax Digital. It is a quick step, but it is not instant, so it should not be left until deadline week.
What if you miss the 7 August deadline?
Do not panic, but do not ignore it either. HMRC has confirmed that late quarterly updates will not attract penalty points during the 2026-27 year, while everyone adjusts to the new system. Because updates are cumulative, a late or imperfect first quarter can be put right in the next one.
The real risk of drifting is practical rather than punitive. Fall one quarter behind and the next deadline arrives with double the work, and the final declaration, which replaces your tax return, does carry penalties in the normal way. The habit is the whole point, and it is much easier to build from quarter one.
The silver lining: an end to year end panic
It is fair to see Making Tax Digital as another piece of admin. It is one. But there is a genuine upside to reporting every quarter.
Instead of scrambling through receipts once a year, you get a clear picture of your finances every three months. That regular check-in lets you:
• See your profit as you go. You know how the year is actually shaping up, rather than finding out nine months after it ended.
• Plan for your tax bill. A running view of income means your January payment stops being a nasty surprise and becomes a number you saw coming.
• Make decisions with current figures. Whether to buy a van, take on a job, or adjust rent is a better decision made with this quarter’s numbers than last year’s.
Help is on hand across the South West
Based in Somerset and Devon, we are already helping tradespeople and landlords across the South West make this switch, from choosing the right software to getting HMRC sign-up and agent authorisation in place.
Our Making Tax Digital packages cover your quarterly submissions and your 2025-26 Self Assessment tax return, with the cost spread into manageable monthly payments: from £75 plus VAT for our core service, or £125 plus VAT for our advanced service.
If the 7 August deadline is creeping up on you, or you would simply like to know where you stand, get in touch with Wessex Commercial Solutions for a friendly, no pressure chat. And if the deadline has already passed, do not panic. Get in touch and we will help you catch up and go from there.