If you missed the first MTD quarterly update deadline of 7 August 2026, the right response is to submit the outstanding update as soon as reasonably possible. HMRC will not apply penalty points or financial penalties for missed quarterly-update deadlines during 2026/27, but the update is still mandatory — and every required quarterly update must be submitted before your 2026/27 MTD tax return can go in.

Making Tax Digital for Income Tax became mandatory from 6 April 2026 for sole traders and landlords with qualifying income above £50,000 in 2024/25. The first quarterly update covered the period from 6 April to 5 July 2026 (or 1 April to 30 June 2026 on calendar periods), with a deadline of 7 August 2026. That date has now passed. What follows covers what you need to check, how to get your records ready, what the first-year easement actually means, and how to stay on track for the remaining three deadlines in 2026/27.

Before submitting anything, it is worth confirming that you were required to join MTD from April 2026. Not every sole trader or landlord entered the regime on 6 April 2026.

You are generally in scope if you are registered for Self Assessment, receive self-employment or property income, and had combined qualifying income above £50,000 in 2024/25. Qualifying income means gross income before expenses and tax — not profit. Employment income, pensions and dividends do not count towards this threshold, though they may still appear on your tax return.

HMRC reviews tax-return information and writes to taxpayers it believes are in scope, but you or your accountant still need to complete the sign-up process. If HMRC says you must use MTD and you disagree, compare their position with your 2024/25 tax return and check whether an exemption or exclusion applies. HMRC's guidance on when MTD for Income Tax applies is the place to start.

If you are unsure of your position, we can review it before anything is submitted incorrectly. See our Making Tax Digital support page for more detail.

A quarterly update is a summary of your digital records for the period — it is not a completed tax return. You do not need capital allowances, private-use adjustments or other year-end tax adjustments in place before you send it. The update should reflect the digital records held at the point of submission.

That said, the figures should still come from reasonably complete records. Submitting on the basis of records that are significantly wrong stores up problems for later cumulative updates. Before you submit, work through the following:

• Reconcile business and rental bank accounts.
• Record any missing sales, rents and expenses.
• Remove duplicate entries.
• Separate personal transactions from business ones.
• Confirm that each income source is correctly set up in your software.
• Compare invoices, rental schedules, payment platforms and bank receipts — bank feeds do not always capture cash receipts or income paid into a secondary account.

You must send a quarterly update for each self-employment and property business covered by MTD. Separate trades or property businesses need their own digital records and their own quarterly submissions.

If your software is not sending the update, check your HMRC authorisation, software compatibility, the selected update period and each income source. Screenshots and error codes will help your software provider, HMRC or accountant diagnose the fault.

HMRC will not apply penalty points or financial penalties for missed quarterly-update deadlines during 2026/27. That removes the immediate financial sting from a late first update, but it does not remove the obligation itself.

The easement should be used to correct the position, not to postpone it. Every required quarterly update must be submitted before your 2026/27 tax return can go through the MTD process. A later cumulative update does not replace an earlier outstanding submission — you still need to deal with it.

Late tax returns and late payments are entirely separate matters. The quarterly easement offers no protection against a late tax return, and normal payment deadlines continue to apply. Return and payment penalties follow their own rules.

The easement also ends with the 2026/27 tax year. From 2027/28 onwards, each missed quarterly-update or tax-return deadline can generate a penalty point. Reaching four points results in a £200 penalty, with further £200 penalties for each additional missed deadline while you remain at the threshold. The first year is the time to build the habits that make those points irrelevant.

HMRC's quarterly update guidance for MTD for Income Tax confirms the periods, deadlines and first-year penalty treatment.

Sending a quarterly update does not create a separate quarterly Income Tax payment. Your final liability still depends on your completed tax return, accounting for other income, allowances, reliefs and year-end adjustments. The usual Self Assessment payment timetable continues, including payments on account where relevant and the balancing payment due after the tax year ends.

The estimated tax figure your software shows after submission is a planning estimate. It may not include employment income, dividends, gains or final reliefs, so treat it as a prompt for cash-flow planning rather than a confirmed bill. A delayed update does make that estimate less useful — incomplete records make it harder to estimate profit and the cash you should put aside for tax.

Updates are cumulative. The second standard update covers 6 April to 5 October 2026, so corrections made now will flow into the next submission. You do not normally need to resend an earlier update after correcting a mistake during the year. The exception is after the fourth update, when you may need to correct and resubmit that final quarterly submission before filing your tax return.

The remaining quarterly deadlines for 2026/27 are 7 November 2026, 7 February 2027 and 7 May 2027. Because updates are cumulative, consistent bookkeeping from now makes each successive submission easier.

Monthly bookkeeping is a sensible minimum for most businesses and landlords. Higher transaction volumes may justify weekly checks. Each month, you should reconcile bank and credit-card accounts, review sales and rental income, capture expenses and receipts, clear duplicates and uncategorised transactions, and separate private costs from business ones.

Set an internal deadline one or two weeks before HMRC's filing date. For the 7 November 2026 update, a late-October review gives you enough time to resolve missing records or access problems without rushing. Assign one person to maintain the records and, where possible, a second to review the update before it goes in. Even if an accountant submits on your behalf, there should be a clear approval process.

After submitting the first update, note which records were missing, which reconciliations took longest and which software issues caused delays. Turn those findings into a monthly checklist. The point of the first year is to get the process working reliably before the penalty regime bites in 2027/28.

Our cloud bookkeeping services support regular reconciliations, consistent categorisation and a clear digital trail behind each update.