Making Tax Digital for Income Tax came into force on 6 April 2026. If your qualifying income exceeds £50,000, you are legally required to comply right now. The first concrete test of that obligation arrives on 7 August 2026. the deadline for your first quarterly update.
Most people understand they need to "do something about MTD." Far fewer understand exactly what 7 August means, what happens if it passes without action, and why the soft landing is being misread by thousands of taxpayers in a way that could cost them money.
The 7 August 2026 deadline is the due date for your first quarterly update under MTD for Income Tax Self Assessment (MTD ITSA).
A quarterly update is a summary of your income and expenses for a specific three-month period, submitted digitally to HMRC through approved software. It is not a tax return. It does not trigger a payment. It is a reporting submission. but it is a legal obligation.
The Q1 period covered by this deadline runs from 6 April 2026 to 5 July 2026. If you were trading or receiving rental income during that period, you are required to report it.
You must submit a quarterly update by 7 August 2026 if:
Qualifying income means gross income before expenses. not profit. A sole trader turning over £55,000 with £20,000 in expenses still has £55,000 of qualifying income. A landlord with £52,000 in gross rents still qualifies even if mortgage interest reduces their profit to £18,000.
This is where the soft landing causes the most confusion.
HMRC has confirmed a soft landing for the 2026–27 tax year (Phase 1 taxpayers only). During this period, HMRC will not issue penalty points for late quarterly submissions. But "no penalty points" does not mean "no consequences."
Even if you avoid penalty points via the soft landing, if you owe tax and pay it late, interest accrues. HMRC's current late payment interest structure:
| Days Late | Additional Penalty | Interest Rate | On What Amount |
|---|---|---|---|
| 1–15 days | None | None | — |
| 16–30 days | 3% surcharge | None | Unpaid tax |
| 31+ days | Further 3% | 10% p.a. daily | Unpaid tax |
| 6 months | +2% penalty | Continues | Unpaid tax |
| 12 months | +2–10% further | Continues | Unpaid tax (behaviour-based) |
Source: HMRC MTD penalties guidance ↗
To be clear: quarterly updates do not themselves trigger a tax payment. The payment obligation arises when HMRC assesses your liability through your Final Declaration. But if that liability is eventually unpaid or underpaid, the interest clock runs from the original payment due date. not from when you eventually filed.
If you are within the Phase 1 threshold and have not yet registered for MTD, here is exactly what you need to do:
The most common source of confusion is people who receive a mix of income types. Remember: only self-employment and UK rental income count. PAYE salary, pension income, dividends and savings interest are all excluded.
A teacher earning £42,000 in PAYE salary plus £8,000 from a small rental property has qualifying income of £8,000. well below the £50,000 threshold. They have no MTD obligation in April 2026.
A contractor earning £30,000 in PAYE through an umbrella company plus £25,000 in direct consultancy fees has qualifying self-employment income of £25,000. below the April 2026 threshold but above the April 2027 threshold. They should start preparing now.
If you are genuinely unsure, use our free checker. it handles all income types and edge cases including joint property, CIS, and gig economy income.
| Submission | Period Covered | Deadline | Soft Landing? |
|---|---|---|---|
| Q1 Update | 6 Apr – 5 Jul 2026 | 7 August 2026 | Yes. No points |
| Q2 Update | 6 Jul – 5 Oct 2026 | 7 November 2026 | Yes. No points |
| Q3 Update | 6 Oct 2026 – 5 Jan 2027 | 7 February 2027 | Yes. No points |
| Q4 Update | 6 Jan – 5 Apr 2027 | 7 May 2027 | Yes. No points |
| Final Declaration | Full 2026–27 year | 31 January 2028 | No, points apply |
Source: HMRC: use Making Tax Digital for Income Tax ↗
No. The soft landing suspends penalty points for late quarterly submissions in 2026–27. It does not suspend the legal obligation to submit. HMRC can still investigate non-compliance, and late payment interest applies regardless. Use the soft landing to get set up properly. not as a reason to delay.
Possibly, but you need to act immediately. Registration through your HMRC online account typically processes within a few days, but connecting your software and entering historical records takes additional time. If you have an accountant, contact them today. If not, register at gov.uk ↗ and start a software trial simultaneously.
Your MTD obligation is assessed based on the previous tax year's income (2024–25). If you were not trading in 2024–25 or your income was below the threshold, you are not in scope for April 2026. However, if your 2025–26 income exceeds the threshold, you will be mandated from April 2027. Start keeping digital records now.
You remain mandated for the current year based on your 2024–25 income. If your 2025–26 income is below the threshold, you can apply to leave MTD. but you must continue submitting until HMRC formally confirms your withdrawal. You cannot simply stop filing because you expect a lower income year.
No. HMRC has confirmed the soft landing applies to Phase 1 (£50,000+) taxpayers only, for the 2026–27 tax year. Phase 2 taxpayers (£30,000–£50,000) joining in April 2027 will face full penalty points from their first submission deadline.
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