Making Tax Digital: What if you’ve missed the first deadline?

Making Tax Digital Has Started – But What If You Haven’t Done Anything Yet?

If you’re a sole trader or landlord and you’ve heard the words Making Tax Digital approximately 4,000 times over the last few years, but still aren’t entirely sure whether it applies to you, you’re definitely not alone.

Making Tax Digital for Income Tax officially started on 6 April 2026 for the first group of taxpayers.

And now we’ve reached another important point.

From September 2026, HMRC is starting to sign up people who should already be using Making Tax Digital but haven’t signed themselves up yet.

So, if you think you might have been supposed to do something about MTD but haven't yet, this is a good time to get things straightened out.

And importantly: don't panic.

Who should already be using Making Tax Digital?

For the current 2026/27 tax year, you generally need to use Making Tax Digital for Income Tax if you are registered for Self Assessment, receive income from self-employment or property, and your qualifying income was more than £50,000 in the 2024/25 tax year.

Qualifying income broadly means your gross income from self-employment and property before expenses – not your profit.

The threshold then reduces over the next two years:

From April 2027: qualifying income over £30,000
From April 2028: qualifying income over £20,000.

This means that even if MTD doesn't affect you yet, it's worth knowing when it potentially will.

What should I have done by now?

If MTD applies to you from April 2026, you should be keeping digital records using compatible software and sending quarterly updates to HMRC.

The first quarterly update deadline was 7 August 2026.

That update contained summaries of your business or property income and expenses. A quarterly update isn't another full tax return, and you don't have to make all of your year-end tax adjustments before sending it.

The next quarterly update deadline is:

7 November 2026.

After that, the remaining deadlines for this tax year are 7 February 2027 and 7 May 2027.

I've missed the August deadline. Am I going to get a penalty?

Here's some reassuring news.

HMRC will not issue penalty points for late quarterly updates during the 2026/27 tax year, which is the first year of mandatory MTD for Income Tax.

That doesn't mean you can simply ignore the missing update, though.

You'll still need to bring your digital records up to date and send the required quarterly updates before you can submit your tax return.

Normal penalties can also still apply if your Self Assessment tax return itself is late or you don't pay tax when it's due.

So this first year gives you some breathing space to get used to the new system – but it's much better to get everything sorted now than leave yourself a large catch-up job later.

What happens if I haven't even signed up?

This is particularly relevant right now.

From September 2026, HMRC says it will start signing up people who need to use MTD for Income Tax for 2026/27 but haven't signed themselves up.

HMRC will do this in stages over the coming months and contact you after you've been signed up.

However, you don't need to wait for HMRC.

You can still sign yourself up, or your agent can do this on your behalf.

HMRC actually recommends signing yourself up where possible because you can make sure your income sources and current circumstances are correct. If HMRC signs you up automatically, it will use the information it already holds about you, which might not reflect recent changes.

What should I do if I've fallen behind?

First of all, don't be embarrassed.

Small business owners have businesses to run, clients to look after and approximately 400 other things competing for their attention. Tax administration isn't always going to make it to the top of the list.

The important thing is to deal with it now rather than continuing to put it off.

You'll need to establish whether MTD applies to you, make sure you're properly signed up, choose compatible software if you haven't already, and bring your digital records up to date from the beginning of the tax year.

If you join MTD partway through the year, HMRC says you'll need to create the required digital records from the start of the tax year so that you can catch up.

Once that's done, you can submit any outstanding quarterly update and get yourself ready for the next deadline.

You don't have to figure it all out alone

Making Tax Digital is a significant change to the way some sole traders and landlords manage their tax records.

If you've missed the first deadline, haven't signed up yet, aren't sure whether you should be using MTD, or simply don't know where to start, getting some help now can make the process much less overwhelming.

At Lavender Ledger, I help small business owners understand what they need to do, get their bookkeeping organised and stay on top of their financial records without all the panic.

If Making Tax Digital has been sitting on your “I'll deal with that later” list, perhaps September is the month to finally tick it off.

Where calm meets clarity in your bookkeeping. 💜