Two MTD deadlines in: what went wrong for sole traders and landlords, and what to do now

The short answer

Making Tax Digital for Income Tax has now been through two quarterly update deadlines, 7 August and 7 November 2026. The first year has gone roughly as the profession expected: a large minority of the people HMRC says are in scope have not signed up, a chunk of those who did sign up did not send their first update, and a lot of the questions reaching accountants are about things that are not actually mistakes.

The good news is that nothing that has gone wrong so far costs you money, as long as you fix it this tax year. GOV.UK is explicit that there are no penalties for missing a quarterly update deadline in 2026 to 2027. The points-based penalty starts with the 2027 to 2028 tax year. What you cannot do is skip the updates altogether: HMRC says you still need to keep digital records and send every quarterly update before you can submit your tax return.

This guide goes through the six things that have actually gone wrong, what to do about each, and the dates that matter between now and January 2028. If you are not sure whether you are in scope at all, start with our MTD scope checker and come back.

What the numbers say about year one

HMRC's own press release on 12 August 2026 gave the first hard figures. More than 436,000 sole traders and landlords had submitted their first quarterly update, and over 570,000 had signed up to the service. The deadline for that first update was 7 August.

Set against HMRC's estimate of how many people are in scope, those numbers tell the story. The National Residential Landlords Association reported in October, citing HMRC estimates, that 864,000 individuals had qualifying income over £50,000 and should be signed up, including 259,000 with landlord income. As of September, 588,204 had signed up and 535,374 of them had submitted the required updates. That left more than 275,000 people in scope who had not signed up at all, seven months into the year they were meant to start.

HMRC has not published a figure for how many people sent the second update by 7 November, and its 2 November press release ahead of that deadline said only that "thousands" had already sent their first.

HMRC's response to the gap was announced in the same August release: from September 2026 it would begin signing up customers who should be using the service for 2026 to 2027 but had not done so. If you are in scope and have been waiting to see what happens, that is what happens. You get enrolled anyway, with the same four updates to catch up on.

Mistake 1: not knowing you were in scope

The thresholds are based on the tax year two years before the one you start in, which is why so many people were caught out. GOV.UK sets them out like this:

• Qualifying income over £50,000 in 2024 to 2025: you should have started using Making Tax Digital for Income Tax from 6 April 2026.
• Over £30,000 in 2025 to 2026: you need to use it from 6 April 2027.
• Over £20,000 in 2026 to 2027: you need to use it from 6 April 2028.

"Qualifying income" is your gross income from self-employment and property added together, before expenses, not your profit. A landlord with £35,000 of rent and a part-time consultancy bringing in £20,000 is over the £50,000 line even if the profit after mortgage interest and costs is a fraction of that. Our guide to whether the MTD threshold is gross income or profit goes through the edge cases, including jointly owned property.

HMRC says it reviews your Self Assessment return each year, checks your qualifying income, and writes to you if you are over the threshold. If you filed your 2024 to 2025 return and got a letter earlier this year, that was it. If you are over £30,000 on the return you file by 31 January 2027, expect the same letter next year. The MTD scope checker gives you the answer now rather than when the letter arrives.

What to do if you are in scope and have not signed up. GOV.UK says that to sign up you must be registered for Self Assessment and have submitted a tax return in the last two years. You then need software that works with Making Tax Digital for Income Tax, and your records for the year so far in digital form. Once you are signed up, your software sends the updates you have missed. Because every update is cumulative (more on that below), catching up is one submission of the year-to-date totals, not a separate reconstruction of each quarter.

Mistake 2: missing the 7 August or 7 November deadline

If you signed up but did not send an update by one of the two deadlines, here is exactly where you stand.

For 2026 to 2027 there is no penalty. The GOV.UK penalties page says, under its own heading for this tax year, that there are no penalties for missing a quarterly update deadline for the 2026 to 2027 tax year. HMRC's August press release repeated it: no penalty points will be issued for late quarterly updates during the year.

But the update is still owed. The same page says you still need to keep digital records and send quarterly updates before you can submit your tax return. A missed update does not vanish. It is a blocker on your 31 January 2028 return until it is sent.

From 2027 to 2028 the points start. For each quarterly update or tax return deadline you miss, you get a penalty point. The threshold is 4 points. Reach it and you get a £200 penalty. You can only get one point per deadline, even if you have more than one business. If you stay below the threshold, each point is removed automatically 24 months after the missed deadline. Once you hit the threshold, points stop expiring on their own: you clear them by sending updates and returns on time for 12 months and by submitting everything outstanding for the previous 24 months. Our MTD penalty calculator shows how quickly a run of late quarters adds up.

The practical lesson from year one is to treat the 2026/27 easement as a rehearsal, not a holiday. Four late quarters in 2027/28 is £200, and the pattern of chasing each deadline from behind is the hard thing to break.

Mistake 3: thinking a mistake means resending the last update

This one generated so many calls that HMRC put it in its 2 November press release as a myth to bust: "If I spot a mistake in my last update period, I need to resend the last update."

You do not, and the reason is how the updates work. GOV.UK says each quarterly update covers from the start of the current tax year (6 April) to the end of the update period. Every update shows your total income and expenses for the tax year so far. So if you find a miscategorised receipt from May in November, you correct it in your records and the corrected year-to-date total goes to HMRC in your next update. GOV.UK puts it as: the gap before each deadline is "so you can make any corrections to your records if you need to, which will then be included in your next update."

The one exception is the fourth update, which covers the whole year to 5 April. GOV.UK says you may need to resend it if you change your digital records afterwards, for example to correct an error you have identified. That makes sense: there is no later update to carry the correction.

So the rule is: fix the record, not the submission. Your software should let you edit a transaction's category or amount and have the running totals follow. If it does not, that is a software problem.

Mistake 4: treating the quarterly update like a tax return

HMRC's first myth on 2 November was "a quarterly update is the same as a tax return." It is not, and misunderstanding this has caused people to spend days on something that should take minutes.

GOV.UK sets out what an update is:

• It contains totals for each income and expense category you used to create your digital records. HMRC does not receive individual receipts or invoices.
• You do not need to make any accounting or tax adjustments before sending it. No capital allowances, no private-use adjustments, no loss claims. Those come at the tax return stage.
• No tax is due when it is sent. HMRC's press release says so directly. Payment dates are unchanged: 31 January, with payments on account on 31 January and 31 July if you make them.

So an update is a summary of your bookkeeping as it stands. If your bank transactions are categorised, the update is already written. The work is in keeping the categorisation current, which is why people whose records are a bank-feed-and-categories setup found August easy and people reconstructing a spreadsheet from statements found it hard. Our guide on how to categorise bank transactions automatically explains the difference.

Two related points from the GOV.UK guidance that trip people up. You can send an update any time from the end of the period up to the deadline, and up to 10 days before the period ends if you are not expecting more transactions. And an update is still required when there is no income or expenses in the period. A quiet quarter is not a reason to skip.

Mistake 5: copying figures between spreadsheets and software

This is the one that is least visible this year and most likely to bite in an enquiry later. Once a digital record has been sent to HMRC in a quarterly update, GOV.UK says you must not manually move it within your software or to other software. Its examples of what is not allowed include copying information by writing it out in another cell or in other software, and using cut and paste or copy and paste to move records.

If you use more than one product, for example a spreadsheet for records and bridging software to submit, the two must be digitally linked. GOV.UK's accepted links include linked cells in spreadsheets, emailing a spreadsheet containing the records, XML or CSV import and export, and transfer by API. Retyping a quarter's totals from one place into another is exactly what the rule exists to stop, and it is how a lot of first updates were produced in August.

The other record-keeping point: GOV.UK says you need to keep your digital records for at least five years after the 31 January submission deadline for the tax year. For 2026/27 that means until at least 31 January 2033. You also still need the original documents or copies, such as bank statements and invoices, that support the return. Our guide on what records you legally have to keep covers the rest.

Mistake 6: forgetting the old Self Assessment year is still running

Joining MTD for Income Tax for 2026/27 does not change anything about 2025/26. Your Self Assessment return for the year to 5 April 2026 is still due online by 11:59pm on 31 January 2027, with the tax for that year and your first payment on account for 2026/27 due the same day. If you want tax collected through your tax code, GOV.UK's cut-off is 30 December 2026.

So between now and February you have two systems running at once: the 2025/26 return on the old basis, and the third 2026/27 quarterly update on the new one. If an accountant does your return, tell them which software holds your 2026/27 records and whether you have sent the first two updates, because they will need to see the same figures.

The dates between now and January 2028

Calendar quarters (1 April to 31 March) are an option if your accounting period runs that way; GOV.UK says the deadlines are the same for both. If you want these dates for your own quarter type and sign-up date, the MTD deadline calculator lays them out.

If you are in the £30,000 group joining in April

You have five months, and the people who found 2026 easy had one thing in common: their records were already digital and categorised before 6 April, so the first update was a button rather than a project. Three things to do before then:

1. Check your 2025/26 qualifying income when you prepare the return due 31 January. Gross self-employment income plus gross property income. Over £30,000 and you are in from 6 April 2027.
2. Get your bank transactions flowing into software now, categorised to the income and expense headings HMRC uses. Starting on 6 April with a backlog is how the first cohort ended up reconstructing quarters in July.
3. Decide who sends the updates. You can submit through recognised software yourself, or your accountant can send them from their software using your digital records. Either way the records have to be yours and digital. Our guide on accountant or DIY for Making Tax Digital weighs it up.

What Ledgers does, and does not do, for MTD for Income Tax

Ledgers connects to your bank, categorises each transaction as it arrives and keeps the digital records HMRC requires, including the year-to-date totals by category that a quarterly update is made of. The Solo plan is £4.99 a month (see pricing), which is where most sole traders and landlords with one business sit. You can start keeping your records in Ledgers for free.

Ledgers is not yet on HMRC's recognised list for Making Tax Digital for Income Tax, so it does not send quarterly updates or submit your tax return. If you are in scope, the updates go from recognised software that takes your records digitally, often your accountant's. Our guide to the best MTD software for sole traders in 2026 covers what was on HMRC's list in October and what each product costs, and our MTD for Income Tax guide has everything else in one place.

Guidance only, not tax advice. Sources: GOV.UK guidance on sending quarterly updates and creating digital records (both updated 16 October 2026), penalties for Making Tax Digital for Income Tax (30 March 2026), who needs to use it and when (26 March 2026), Self Assessment deadlines, and HMRC press releases of 12 August 2026 and 2 November 2026. Sign-up figures for September and October are HMRC estimates as reported by the National Residential Landlords Association on 15 October 2026. All as at 11 November 2026.

Frequently asked questions

I missed the 7 August or 7 November quarterly update. Will I be fined?

Not for the 2026 to 2027 tax year. GOV.UK says there are no penalties for missing a quarterly update deadline in this first year. You still have to send every update before you can submit your tax return, so send the missed one now rather than waiting for the next deadline.

I found a mistake in my last quarterly update. Do I resend it?

Usually no. Each update is cumulative, covering 6 April to the end of the latest period, so a correction to your records simply flows into the next update. The exception is the fourth update, which you may need to resend if you change your records after sending it.

When is the next MTD for Income Tax deadline?

7 February 2027, for the period 6 April 2026 to 5 January 2027 (1 April to 31 December if you use calendar quarters). The fourth update is due 7 May 2027, and the tax return and payment for 2026 to 2027 are due by 31 January 2028.

I haven't signed up yet. What happens?

From September 2026 HMRC has been signing up people who should be using the service but haven't. You still need recognised software and digital records, and you must send all four updates before your tax return. The sooner you start, the fewer quarters you have to catch up on at once.

Do I have to send an update if I had no income or expenses in the quarter?

Yes. GOV.UK says an update is still required when there is nothing to report for the period. Your software sends the year-to-date totals, which may be unchanged from the last update.

Who joins MTD for Income Tax in April 2027?

Anyone whose qualifying income from self-employment and property was more than £30,000 in the 2025 to 2026 tax year. HMRC checks your Self Assessment return each year and writes to you if you're over the threshold. The £20,000 threshold follows from 6 April 2028.

Tools and guides for this

• UK tax rates 2026/27Every rate and threshold in one place, with the source for each.
• Making Tax Digital for Income TaxWho's in scope, the dates, and what to do now.
• Corporation Tax calculatorMarginal relief, short and long periods, and when to pay.

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