HM Revenue & Customs (HMRC) has issued a reminder to sole traders and landlords with a combined turnover of over £50,000 that they must send their first quarterly update under Making Tax Digital (MTD) by 7 August. The warning was posted on X on Monday, August 3, stating that time is running out.
Who needs to act
The update applies to those who met the turnover threshold in the 2024/25 tax year. They are now required to submit four quarterly updates on income and expenses using approved software.
HMRC introduced MTD for all VAT-registered businesses in 2022 and is now rolling it out to individual taxpayers. People with £50,000 of gross annual trading and/or rental income were told to sign up before April 6, 2026, unless they are exempt. Some exemptions are automatic, but others require checking official guidance.
Penalties and grace period
The quarterly updates do not change the payment schedule, as tax bills are still settled via the annual tax return. For the 2026 to 2027 tax year, there are no penalties for missing a quarterly update deadline, giving people time to adapt. However, fines will be imposed for not keeping records at all, and existing penalties for late filing of tax returns or payment still apply.
This is the first phase of the three-phase MTD for Income Tax programme. Sole traders and landlords with qualifying income of £30,000 for the 2025 to 2026 tax year will need to start using the system from April 6, 2027. Those with £20,000 of qualifying income for the 2026 to 2027 tax year will need to switch from April 6, 2028.
Official guidance and eligibility rules are available on the UK Government website.
