MTD Deadline Alert: First Quarterly Update Due 7 August — Are You Signed Up?
Making Tax Digital for Income Tax (MTD ITSA) went live on 6 April 2026 — but an alarming number of sole traders and landlords who are legally required to use it still have not registered. With the first quarterly submission deadline of 7 August 2026 now less than eight weeks away, the Institute of Chartered Accountants in England and Wales (ICAEW) has issued an urgent call to action: sign up now, before it is too late.
- MTD for Income Tax has been mandatory since 6 April 2026 for sole traders and landlords with qualifying income above £50,000.
- The first quarterly update (covering 6 April – 5 July 2026) must be submitted to HMRC by 7 August 2026.
- HMRC estimates 864,000 taxpayers must comply — yet only around 280,000 have signed up so far.
- You must use MTD-compliant software (such as Xero, QuickBooks or Sage) and keep digital records from day one.
- If you are unsure whether you are affected, speak to your accountant immediately — time is running out.
What Is Making Tax Digital for Income Tax?
Making Tax Digital for Income Tax Self-Assessment (MTD ITSA) fundamentally changes the way self-employed people and landlords report their income to HMRC. Rather than submitting a single annual tax return, you are now required to submit four quarterly updates throughout the year, followed by a Final Declaration at the end of the tax year.
- Digital record-keeping: You must record all income and expenses using MTD-compatible software or a compliant spreadsheet with bridging software.
- Quarterly updates: A summary of income and expenditure is submitted to HMRC every three months. These are not full tax returns — they are interim snapshots of your financial position.
- Final Declaration: At the end of the tax year, you confirm your total figures, claim any reliefs, and finalise your tax liability — replacing the traditional Self-Assessment return.
- Tax payment dates unchanged: You will still pay on 31 January and 31 July. More frequent reporting does not mean more frequent payments.
Who Must Comply Right Now?
The current wave of MTD for Income Tax applies to sole traders and landlords whose combined qualifying income — that is, gross business turnover or rental receipts before expenses — exceeded £50,000 in the 2024/25 tax year. HMRC used your 2024/25 tax return to determine whether you fall within this first phase.
The threshold will fall further in subsequent years, bringing more taxpayers into scope:
- From April 2026: Qualifying income above £50,000 — mandatory now.
- From April 2027: Qualifying income above £30,000 — register in advance.
- From April 2028: Qualifying income above £20,000 — start preparing now.
If your income is approaching any of these thresholds, speak to an accountant now rather than waiting until the deadline year arrives.
The Registration Gap: Why ICAEW Is Worried
Of the estimated 864,000 taxpayers legally required to use MTD from April 2026, the ICAEW reports that only approximately 280,000 have registered to date — leaving more than 580,000 taxpayers potentially non-compliant. The institute is explicitly encouraging those who have not yet signed up to do so immediately, stating that registering in advance of the 7 August deadline will give both taxpayers and their agents time to resolve any issues that arise during onboarding.
- Missing the first quarterly update (due 7 August 2026) could trigger a penalty notice from HMRC under the new points-based penalty system.
- If you are not yet signed up, the registration process itself takes time — HMRC must issue a confirmation before you can submit. Do not leave this until July.
- Paper records are no longer acceptable for those in scope. You must have MTD-compatible software in place from 6 April 2026 onwards.
- Agents must also be authorised through HMRC's agent services account to submit on a client's behalf — another reason to contact your accountant without delay.
How 360Accounts Can Help
Navigating Making Tax Digital does not have to be stressful. At 360Accounts, we work with sole traders and small businesses across Guildford and Surrey to make the transition as smooth as possible — from checking whether you are affected to setting up the right software and managing every quarterly submission on your behalf.
Not sure if you need to sign up? Let’s find out together.
We’ll check your MTD status, set up compliant software, and handle your quarterly updates — so you can focus on running your business.
Get in Touch Today