Thousands of sole traders and landlords missed the first Making Tax Digital deadline on 7 August 2026. If you are one of them, the position is better than you might think, but it is not something to leave.
No penalty points this year
HMRC is not issuing penalty points for late quarterly updates in 2026/27, the first year of MTD for Income Tax. The same relief applies to anyone joining in April 2027, for their first four updates. After that, late updates build up points, and reaching the threshold triggers a financial penalty.
You still have to send them
The relief is on the penalty, not the obligation. All four quarterly updates for 2026/27 must be sent before you can submit your final declaration, which is due by 31 January 2028. Late returns and late payment are still penalised as normal.
Catching up is simpler than it sounds
Quarterly updates are cumulative. Each one carries your figures for the tax year so far. Once your records are up to date, the missing update and the current one draw on the same numbers. The hard part is the bookkeeping, not the filing.
What to do now
First, check you are signed up and your software is connected to HMRC. Second, bring your records up to date to 5 October. Third, send the missed update and the 7 November update together. If you are not sure whether you should be in MTD at all, our post on the threshold test explains how it works.
If you would rather hand it over, we file quarterly updates for sole traders and landlords across Gloucestershire. See our Making Tax Digital page.
