The first quarterly deadline under Making Tax Digital for Income Tax fell on 7 August, covering the period from 6 April to 5 July 2026.
For sole traders and landlords with qualifying income above £50,000, this marked the end of the old annual tax cycle and the start of ongoing digital reporting.
HMRC has now published the first set of results, and there is plenty for businesses to take from how the deadline actually played out.
The numbers so far
HMRC confirmed that more than 436,000 sole traders and landlords successfully sent their first quarterly update, out of over 570,000 who have signed up to the service so far.
This means that roughly only half of those expected to submit actually did so for the first deadline and more than 130,000 registered but didn’t report on time.
It may not be surprising to some, as no penalty points apply for late updates in the 2026/27 tax year, so anyone who missed the deadline can still submit now without a mark against their record.
However, it is still important to remember that those affected by this first staging date are legally required to comply, whether a penalty is issued or not.
Craig Ogilvie, HMRC's Director of Making Tax Digital, described the milestone as encouraging, noting that many customers have found the process straightforward once they are set up with the right software.
From September, HMRC will start signing up customers who should be using MTD but have not yet registered, working through this in stages over the coming months.
What worked well
For clients who had digital records in place well before the deadline, connected their bank feeds early and understood what quarterly updates actually require, the process was genuinely, fairly quick – although there were some issues with HMRC’s systems on the day.
A quarterly update is a summary of income and expenses, not a tax return, and no year-end adjustments are needed before it is sent.
Firms and clients who treated MTD as an ongoing habit rather than a one-off task tended to have the smoothest run.
The earlier records were up to date, the less there was to sort out in the final few days before 7 August. This is something that everyone required to comply – whether this year or from April 2027 or April 2028 – should take away.
Where taxpayers struggled
The run-up to the deadline was not without difficulty and several patterns emerged repeatedly. Common issues included:
- Clients who believed they were keeping digital records but were not. A spreadsheet saved to a desktop is not the same as a compliant digital record.
- Landlords and sole traders with more than one income source not realising that each business needs its own separate quarterly update.
- Confusion over the £50,000 threshold, which is based on gross income rather than profit. This has caught out businesses with high costs relative to turnover, particularly in construction and hospitality.
- Clients leaving bank feed connections and record tidying until the days before the deadline, leaving very little room to fix problems.
- Software and HMRC systems occasionally showing different statuses for the same submission, meaning a successful message in the software did not always match what appeared on HMRC's side.
Lessons for the next quarterly deadline
The next quarterly update is due on 7 November, covering 6 April to 5 October. That gives less time than most people expect, so it is worth acting on what the first quarter revealed rather than waiting until the deadline is close again.
A few things are worth building into your routine now:
- Keep digital records up to date throughout the quarter rather than catching up at the end of it.
- Check whether you have more than one income source in scope, since each one needs its own update.
- Remember that a quarterly update is still required even if a business had no income or expenses in the period.
- Confirm that your software submission has actually registered on HMRC's side, rather than relying on a success message alone.
- If you are not yet signed up, do it now rather than waiting for HMRC to do it for you from September.
Don't wait to be signed up automatically
Signing up in advance means you stay in control of the process, choose software that suits your business and have time to prepare properly, rather than reacting to a letter from HMRC.
The Self Assessment deadline of 31 January has not changed and quarterly updates do not replace it.
However, anyone in scope of MTD will need their quarterly updates in place before they can submit that return next year, so don’t wait any longer if you are yet to get started.
Getting ready for what comes next
The first deadline has shown that MTD is as much about routine and record keeping as it is about the software used to submit figures.
The businesses that found it easiest were the ones who treated it as a change to how they work throughout the year, not simply a new form to fill in four times a year.
If you haven't yet sent your first quarterly update, are unsure whether MTD applies to you, or want support getting ready for 7 November, please speak to our team.
