Making Tax Digital
Making Tax Digital deadline: What sole traders need to do before 7 August 2026.
The first Making Tax Digital for Income Tax quarterly update deadline is approaching. Here is who is affected, what needs to be submitted and what sole traders and landlords should do now.
Quick answer
The first Making Tax Digital for Income Tax quarterly update for most affected sole traders and landlords must be submitted to HMRC by 7 August 2026. Those required to use MTD from April 2026 should already be keeping digital records and using compatible software.
For those affected by the first phase of Making Tax Digital for Income Tax, the new rules have already started.
From 6 April 2026, eligible sole traders and landlords have been required to keep digital records of their income and expenses and use compatible software to manage and report their tax information.
Now the first major reporting deadline is approaching.
The first quarterly update must be submitted to HMRC by 7 August 2026.
And with just weeks remaining, new research from Lloyds Banking Group suggests that many sole traders may still be playing catch-up.
According to research involving 1,000 UK sole traders with income of at least £50,000, 55% said they still had work to do before they were ready for the new digital tax deadline.
So, who needs to act, what does the 7 August deadline actually involve and what should affected taxpayers be doing now?
At a glance
The key Making Tax Digital facts for 2026
£50,000+
Qualifying income threshold for those required to use MTD for Income Tax from 6 April 2026.
7 August
The deadline for the first quarterly update for the 2026/27 tax year.
4 updates
Quarterly updates are generally required during each tax year under MTD.
2026/27
No penalty points will apply for late quarterly updates during the first mandatory year.
Who needs to use Making Tax Digital for Income Tax?
Making Tax Digital for Income Tax is being introduced in phases.
You generally need to use MTD for Income Tax from 6 April 2026 if:
- you are registered for Self Assessment as a sole trader or landlord;
- you receive income from self-employment, property, or both; and
- your total qualifying income was more than £50,000 in the 2024/25 tax year.
The threshold then reduces to:
More than £30,000
Mandatory from 6 April 2027.
More than £20,000
Mandatory from 6 April 2028.
HMRC determines when you need to join MTD by looking at qualifying income reported through an earlier tax return.
Important
Even if you have not received a letter from HMRC, it remains your responsibility to check whether and when you need to use Making Tax Digital for Income Tax.
You can check the official
HMRC guidance on who needs to use Making Tax Digital for Income Tax
.
What is due on 7 August 2026?
For most people using standard quarterly update periods, the first MTD update covers the period from 6 April to 5 July 2026 and must be submitted by 7 August 2026.
Those using calendar update periods will generally report figures for 1 April to 30 June 2026, with the same 7 August deadline.
What is a quarterly MTD update?
A Making Tax Digital quarterly update is not a full tax return. Compatible software uses the digital records maintained during the reporting period to generate totals for relevant categories of income and expenses, which are then submitted to HMRC.
HMRC confirms that you do not need to make accounting or tax adjustments before sending the quarterly update.
Your compatible software generates the update using totals from the digital records created during the quarter.
What are the MTD quarterly deadlines for 2026/27?
The four standard quarterly update deadlines for the 2026/27 tax year are:
Those who joined MTD from April 2026 must still complete their 2025/26 Self Assessment tax return in the usual way by 31 January 2027, as that return relates to the tax year before mandatory MTD began.
Action checklist
What do you need to do before the 7 August MTD deadline?
If you are affected by Making Tax Digital for Income Tax, there are several things that should be in place before your first quarterly update is sent.
Check whether you are actually within the MTD rules
Do not assume that MTD applies simply because you are self-employed, or that it does not apply because you have not heard directly from HMRC. The key figure is generally your qualifying gross income from self-employment and property, before expenses are deducted.
Make sure you have signed up
Being registered for Self Assessment does not necessarily mean you are fully set up for Making Tax Digital for Income Tax. HMRC states that those required to use MTD in 2026/27 should sign up now. Where appropriate, an accountant or tax agent can also complete the sign-up process for you.
Use compatible MTD software
Your quarterly updates must be sent using software that is compatible with Making Tax Digital for Income Tax. Your software should allow you to create and maintain digital records of relevant business or property income and expenses and submit the required information to HMRC.
Bring your digital records up to date
Your first quarterly update is based on income and expense information recorded digitally during the reporting period. If transactions, receipts or expenses have not been properly recorded, there may be a significant amount of catching up to do before the deadline.
Check your quarterly update periods
Your software will generally default to standard periods aligned with the tax year. Some businesses can use calendar update periods instead, but this should be dealt with before the first quarterly update is sent.
Need help with Making Tax Digital?
Do not leave your first MTD quarterly update until the last minute.
RiverView Portfolio can help you understand whether MTD applies to you, get your bookkeeping and digital records in order, and prepare for your ongoing reporting requirements.
What happens if you miss the 7 August 2026 MTD deadline?
There is an important distinction for the first mandatory year of Making Tax Digital for Income Tax.
HMRC’s position for 2026/27
HMRC has confirmed that there are no penalties for missing a quarterly update deadline during the 2026/27 tax year.
However, this does not mean that quarterly updates can simply be ignored.
You still need to maintain digital records and submit all required quarterly updates before you can submit your tax return.
Penalties can also still apply if your tax return is late or you fail to pay tax by the relevant deadline.
The first-year concession is therefore best viewed as protection against initial teething problems, rather than a reason to delay getting ready.
You can read more in HMRC’s official
guidance on penalties for Making Tax Digital for Income Tax
.
55%
of sole traders surveyed by Lloyds said they still had work to do before they were ready for the new digital tax deadline.
Source: Lloyds Banking Group research published 13 July 2026.
Can Making Tax Digital actually make running a business easier?
The immediate concern may be meeting another HMRC deadline, but better digital record-keeping can have wider practical benefits for a business.
Among respondents already preparing for their first MTD submission in the Lloyds research:
40%
said digital tax management had helped them become more organised.
28%
said it had reduced last-minute tax stress.
More regular bookkeeping can also help business owners maintain a clearer picture of:
- income and expenditure;
- cash flow;
- outstanding costs;
- overall business performance; and
- their likely tax position.
Software alone will not automatically make every business more efficient. However, when suitable systems and processes are put in place, the move to digital record-keeping can be an opportunity to improve financial visibility rather than simply another administrative burden.
The 7 August deadline is closer than it sounds
For affected sole traders and landlords, Making Tax Digital for Income Tax is no longer a future change.
The rules have been mandatory for the first group since 6 April 2026, and their first quarterly update is due by 7 August 2026.
If you are still unsure whether MTD applies to you, have not signed up, have not chosen compatible software or have fallen behind with your digital records, acting now can prevent a manageable transition from becoming a last-minute rush.
RiverView Portfolio
Need help getting ready for Making Tax Digital?
We help sole traders and business owners understand their tax obligations, maintain accurate financial records and prepare for changes such as Making Tax Digital. Whether you need help checking if MTD applies, choosing the right bookkeeping approach or managing the ongoing process, getting advice early can save considerable time and stress.
Frequently asked questions
Making Tax Digital deadline FAQs
