Making Tax Digital Is Now Live — And Your First Deadline Is 7 August 2026

Making Tax Digital for Income Tax (MTD for ITSA) is no longer on the horizon. It went live on 6 April 2026 for the first wave of taxpayers, and the first quarterly deadline — 7 August 2026 — is now fewer than ten weeks away.

If you are a sole trader or landlord whose gross income from self-employment and property exceeded £50,000 in the 2024/25 tax year, you are already in scope. That means you are required to be keeping digital records and you need to make your first quarterly submission to HMRC by 7 August 2026.

For everyone else — those with qualifying income between £20,000 and £50,000 — the clock is also ticking. The thresholds drop in April 2027 and again in April 2028, and the time to prepare is now, not when the mandate arrives.

This post sets out what Phase One taxpayers need to do before 7 August, what the common early mistakes are, and what those not yet in scope should be doing to get ahead.

The 7 August 2026 deadline: what it means in practice

The first quarterly update under MTD for ITSA covers the period 6 April to 5 July 2026. The submission deadline is 7 August 2026.

This is not a tax payment date. It is a submission of a summary of your income and expenses for that quarter, sent to HMRC through your MTD-compatible software. The figures are cumulative and year-to-date, not a standalone mini-return. You are building a running picture of your financial position that HMRC can see in real time.

HMRC has confirmed a soft landing for the 2026/27 tax year, which means penalty points will not be issued for late quarterly submissions this year. That is a sensible allowance while taxpayers and agents adjust to the new system. However, it does not remove the obligation to file — and it absolutely does not cover late payment of tax, which carries full consequences from day one. Our advice is straightforward: treat the soft landing as a buffer for genuine teething problems, not as permission to delay.

The quarterly deadline schedule for 2026/27

Here are all four quarterly deadlines for the current tax year:

Quarter	Period covered	Deadline
Quarter 1	6 April – 5 July 2026	7 August 2026
Quarter 2	6 July – 5 October 2026	7 November 2026
Quarter 3	6 October 2026 – 5 January 2027	7 February 2027
Quarter 4	6 January – 5 April 2027	7 May 2027

If you are VAT-registered and already file quarterly VAT returns, you may prefer to elect for calendar quarters (ending 30 June, 30 September, 31 December and 31 March). The same deadlines apply either way.

What you need to have in place before 7 August

If you are in Phase One and have not yet acted, here is where to focus your attention over the coming weeks.

1. HMRC registration You must be registered for MTD for ITSA with HMRC before you can make any submissions. If this has not been done, it needs to happen as a matter of priority. We can handle this on your behalf as part of your Candal Accountancy service.

2. MTD-compatible software Submissions cannot be made through HMRC's own portal — you must use approved third-party software. At Candal Accountancy, we work with Xero, FreeAgent and QuickBooks, all of which are fully MTD-compatible and support direct submission to HMRC. If you are not already on one of these platforms, now is the time to make the switch.

3. Digital records from 6 April 2026 All business income and expenses for the period from 6 April must be recorded digitally, with date, amount and category logged for each transaction. Spreadsheets are only permitted if they are digitally linked to compliant submission software — copy-and-pasting data between systems does not satisfy the requirement.

4. Bank feed connected The most reliable way to maintain accurate, timely records is to connect a live bank feed directly within your accounting software. This automates the import of transactions and significantly reduces the risk of omissions or errors.

Common mistakes we are already seeing

A month into the new regime, a few patterns are emerging among taxpayers who are finding the transition more difficult than expected.

Starting from scratch in July. The quarter runs from 6 April. If you leave everything until late July, you are categorising three months of transactions under pressure. The process is far smoother when records are kept up to date monthly.

Assuming a spreadsheet is sufficient. A spreadsheet on its own does not meet the MTD requirement unless it is digitally linked to compliant software that can submit directly to HMRC. Many taxpayers who have relied on spreadsheets for years have needed to rethink their approach.

Conflating quarterly updates with tax payments. Quarterly updates do not trigger a tax payment. Your tax liability remains due on 31 January 2028 (for 2026/27), with payments on account applying in the usual way. The updates are a reporting obligation, not a payment mechanism.

Missing the multiple-source requirement. If you have both self-employment income and rental income, you need to submit separate quarterly updates for each source. That is eight quarterly submissions per year in total, not four.

What about the final declaration?

After your four quarterly updates, you complete a final declaration through your MTD software. This replaces the traditional Self-Assessment tax return and is due by 31 January following the end of the tax year. For 2026/27, that deadline is 31 January 2028.

The final declaration is where you add other sources of income — employment income, dividends, bank interest — and claim any allowances or reliefs. It consolidates everything HMRC has received through your quarterly updates into a finalised tax position.

Not yet in scope? Here is why you should act now anyway

If your qualifying income is below £50,000, you are not yet required to comply. But the thresholds are narrowing quickly.

From April 2027, MTD will extend to those with qualifying income above £30,000. From April 2028, the threshold drops further to £20,000. At that point, the majority of self-employed individuals and landlords in the UK will be within scope.

The practical implication is this: the habits, software and record-keeping processes that need to be in place for MTD take time to establish. Waiting until the mandate arrives means starting under pressure, with no soft landing and no margin for error. The clients we are seeing transition most smoothly are those who began using cloud accounting software well before their mandation date.

If your income is approaching the current £50,000 threshold, or if you expect to enter scope in 2027, we would encourage you to speak to us now about getting set up.

How Candal Accountancy can help

We are supporting clients through every stage of the MTD transition — from initial HMRC registration and software setup, through to the preparation and submission of quarterly updates and the final declaration.

If you would like us to handle your quarterly submissions as part of your ongoing service, please get in touch. We serve clients across Redhill, Reigate and throughout Surrey, and we are happy to review your specific circumstances and make sure everything is in order before 7 August.

Call us on 01737 309911 or contact us via the website.

Get In Touch

This post is for general information purposes. Tax rules can be complex and depend on individual circumstances. Please speak to us before making decisions based on the above.