HMRC’s new system of Income Tax reporting for the self-employed is here. Making Tax Digital, designed to modernizse the UK’s tax system by fully digitiszing record-keeping and reporting, was brought into effect on 6th April 2026 for the 2026/27 tax year.
At present, all self-employed individuals and landlords earning gross annual income of £50,000+ must submit quarterly income and expense reports to HMRC, using HMRC-approved software. Following a final digital declaration confirming accounts at the end of the year, payment must then also be made online.
Over the next few years, the Making Tax Digital scheme will be rolled out further, to include earners in lower income brackets, down to £20,000+ gross income by 2028. Penalties for late submission of quarterly reports, final declarations and late payments will be points-based, and can quickly rack up if you’re not careful, resulting in several hundred pounds worth of fines.
It is crucial that all self-employed people and landlords with property income get to grips with Making Tax Digital deadlines and penalties today, to save themselves a mountain of hassle further down the line.
Understanding Your MTD Deadlines
Even if your typical income is yet to be folded into HMRC’s new digital tax return scheme, it soon will be, which is why it’s of paramount importance you familiarise yourself with the various Making Tax Digital deadlines. Landlords and self-employed folks earning over £50,000 a year will need to meet these deadlines from 2026 onwards.
Quarterly Submission Deadlines
The whole point of MTD is to make the UK’s tax reporting and payment system more modern, more accurate, and more cost-effective. HMRC estimates that billions of pounds are lost through mistakes in reportage using the current Self-Assessment system. To counteract this, it has created a digital system through which you must submit quarterly updates on your incomings and outgoings via approved HMRC-linked software.
Here’s what the quarters are and when the deadline to submit your digital update is for each:
| Quarter Dates | Submission Deadline | |
| Q1 | 6th April – 5th July | 7th August |
| Q2 | 6th July – 5th October | 7th November |
| Q3 | 6th October – 5th January | 7th February |
| Q4 | 6th January – 5th April | 7th May |
Final Declaration Deadline
Whilst you have to submit an update on your income and expenses each quarter, you won’t pay tax each time. Instead, these updates are intended just to ensure your record-keeping and HMRC’s are matched as accurately as possible.
Self-employed sole traders, limited companies, landlords and partnerships still only pay tax on income once a year, following a ‘final declaration’ via MTD.
The deadline for this final declaration remains the same as it was under Self-Assessment: 31st January the year following. So, for the Making Tax Digital tax year of 2026/27, your deadline for final declaration via MTD software will be 31st January 2028.
Income Tax Payment Deadline
Once you’ve made your final declaration through your chosen Making Tax Digital software, it’s time to pay your tax bill. The good news is that payment deadlines, like final declaration deadlines, remain the same as they were under Self-Assessment. Balancing payments on your 2026/27 MTD tax bill must be made by 31st January, whilst second payments on your account are to be made by 31st July.
To aid with the transition from Self-Assessment to Making Tax Digital, HMRC is affording a grace period on MTD Income Tax payments: You will be able to make payments up to 30 days after the deadline without triggering a penalty or fine, provided it is your first year in the scheme.
Making Tax Digital Record-keeping Deadlines for Different Income Brackets
HMRC’s new digital system is yet to affect everyone, but it will very soon. Here at UWM we’ve already helped countless clients prepare for MTD by updating their accounting systems, reporting processes, and record-keeping methods, and we suggest you get on board now too, before it’s too late.
For sole traders and landlords earning over £50,000 gross annual income, you need to have been keeping MTD records as of 6th April 2026. Your first quarterly submission deadline is 7th August 2026 for Q1. There is various Making Tax Digital software for landlords and sole traders available to you, both free and paid, which you will need for record-keeping and reporting.
For those earning over £30,000 gross annual income, you can expect to be folded into the Making Tax Digital scheme as of 6th April 2027, with a first quarterly submission deadline of 7th August 2027.
And finally, Making Tax Digital for limited companies, sole traders, landlords and partnerships earning £20,000+ gross annual income is expected to follow in April 2028, with a first quarterly submission deadline of 7th August 2028.
Understanding the Penalty Point System for Late Submission
The Making Tax Digital deadlines for quarterly submissions are not a suggestion, they are a hard deadline which, if missed, will incur penalties against you. As a self-employed taxpayer, you will accrue penalty points for each deadline missed—be it the deadlines for quarterly updates, final declarations, or payment of your tax bill.
Under MTD, you accrue one penalty point for every deadline missed. Once you hit four penalty points, you are issued a £200 fine. For every subsequent deadline missed you will receive a further £200 fine for each, until your fines are paid and account cleared of points.
Note: An individual can only be hit with one penalty point per deadline, so if, for example, you have multiple self-employed businesses, which you miss the same deadline for, you will still only receive one penalty point.
Note: As part of the transition to MTD, HMRC are allowing a grace period for the first year, meaning that you will not accrue any penalty points for missing quarterly submission deadlines during the 2026/27 tax year. You must, however, still keep records using MTD software and submit them throughout the year, as you’ll need them in order to submit your final end-of-year tax return.
How to Clear Your Self-employed Tax Account of Penalty Points
Clearing your account of penalty points depends on the number of points you have:
If you have under four points, your penalties will be automatically cleared 24 months after the date each was issued.
If you have over four points, your penalties will be cleared only once you submit your quarterly updates, final declaration and payments on time for a period of at least 12 months, and have settled all outstanding reportage and payments covering the previous 24 months.
Conclusion: Prepare for MTD today, save yourself stress tomorrow
Making Tax Digital might seem like a bit of a headache on the horizon, but once underway, it should make our lives much easier. By keeping records of our income and expenses from self-employment and property on a rolling basis, stored on user-friendly software, submitting and paying our year-end tax returns should be a breeze.
Regardless, whether we like it or not, Making Tax Digital is here to stay. For many sole traders and landlords, the first quarterly submission deadline of 7th August 2026 is right around the corner, and though penalties for late quarterly submissions are waived this first year, that won’t soon be the case.
Get ahead of the game and save yourself heaps of hassle, potential penalties and expensive fines down the line. Choose Making Tax Digital software that works for you, start keeping rolling records, and reach out to an accountant for friendly, professional advice if you need a helping hand.
