The first Make Tax Digital deadline is approaching; here’s what you need to do

Freelancers, self-employed workers, and landlords, this one’s for you. The first Making Tax Digital (MTD) quarterly update is around the corner. 

By August 7, sole traders with a combined annual income over £50,000 are required to submit their first quarterly update to HMRC.

This isn’t a tax return. You just need to report your totals to HMRC four times a year now instead of one. No tax is calculated, and nothing is owed on the day; that still happens at the end of the tax year, as always. 

The good news? It’s straightforward to submit, as long as you know what you’re doing.

The first MTD quarterly update deadline is around the corner

On August 7, all self-employed individuals and landlords earning over £50,000 a year will need to submit their first quarterly update to HMRC. This will include a summary of their income and expenses for the period from April 6 to July 5, 2026.

The update is quite simple. It doesn’t involve calculations or tax owed on the day. You’re simply reporting totals such as sales and expenses. Anyone running more than one business, or letting more than one property, will need to file a separate update for each.

Even better, there’s a soft landing for the first deadline. No penalty points will be issued for late quarterly updates in the first year of MTD, as sole traders get to grips with the new system. 

However, once the soft landing ends in 2027, you get a point. After you rack up four points, you’re hit with a £200 fine, and a further £200 charge for every missed deadline after that.

As of April 6, Making Tax Digital for Income Tax Self-Assessment (ITSA) became mandatory for self-employed individuals and landlords, but this is its first real test. It’s part of HMRC’s long-running program to shift the UK tax system away from annual paperwork and towards continuous reporting.

Here’s what to do before the deadline

Before the 7th of August deadline, check you’re registered with HMRC for MTD, as you won’t be able to do this on the day. 

To do this, you’ll have to already be registered for Self Assessment, and have a tax return filed within the last two years. You’ll also need a Government Gateway user ID and password (the same login you use for your Self Assessment) and the date you started your business, or started receiving property income. 

After that, we recommend choosing MTD-compatible software before you register, as you’ll need it authorised and connected before your first submission is due. 

FreeAgent is free if you bank with NatWest, RBS, or Ulster Bank and handles invoices, expense tracking and MTD submissions. Sage and Clear Books also offer free MTD-compatible software, while Xero and QuickBooks offer more generous invoicing limits and bank feed integrations, but at a premium.  

Once you’re set up, categorise your income and expenses as you go, rather than sorting out four months of records in one sitting. This is one of the best things you can do to make sure your updates are accurate, and to ensure a smooth submission. 

For a more comprehensive breakdown of the scheme, its different thresholds, and your list of responsibilities, check out The Startup’s guide to Making Tax Digital (MTD).