Making Tax Digital is live — and your first deadline is 7 August
After years of delays, Making Tax Digital for Income Tax finally arrived on 6 April 2026. If you’re a sole trader or landlord with qualifying income over £50,000, you’re already in the new system — and your first quarterly update, covering 6 April to 5 July, is due by 7 August 2026.
Who’s in scope right now
MTD applies to individuals whose combined gross income from self-employment and property topped £50,000 in their 2024/25 tax return. Gross means turnover before expenses — a business with £45,000 of trading income and £10,000 of rent is in, even if profit is far smaller.
The net widens from here: the threshold drops to £30,000 in April 2027 and £20,000 in April 2028. Most sole traders and landlords will be inside the system within two years.
What actually changes
Three things:
- Digital records. Income and expenses must be recorded in MTD-compatible software — a spreadsheet plus bridging tool at minimum, though proper software earns its keep quickly.
- Quarterly updates. Instead of one annual return, a summary of income and expenses goes to HMRC every three months — by 7 August, 7 November, 7 February, and 7 May.
- A final declaration at the year end replaces the Self Assessment return, confirming the totals and adding any other income. The tax payment deadline hasn’t moved: 31 January as before.
Quarterly updates are summaries, not four mini tax bills — you won’t pay tax quarterly. But they do mean your records can’t hibernate until January anymore.
Penalties are points-based
Each missed update earns a penalty point; at four points, a £200 fine lands, and the clock only resets after a sustained clean streak. The old habit of doing everything the week before the deadline doesn’t survive contact with four deadlines a year.
What we’re doing with clients
As a Xero-only practice, our MTD clients were ready before April: bank feeds on, records digital, quarterly updates filed from the same books we already keep. If you’ve had an HMRC letter — or you’re near the threshold and unsure — the fix is a short conversation, not a crisis. MTD work is priced into your personalised fixed quote, so you’ll know the cost before anything starts.
Near the threshold, or already behind on the first update? Book a free consultation and we’ll tell you exactly where you stand.