Today is the day. 7 August 2026 is the deadline for the first Making Tax Digital quarterly update, covering 6 April to 5 July 2026, for the 864,000-plus sole traders and landlords HMRC says are in scope. The public message has been simple and loud: don't miss it.
Nine days ago HMRC published something considerably more useful, and almost nobody outside the software industry has read it. Edition 5 of the Making Tax Digital for Income Tax software developer newsletter is written for the firms who build the filing software, and buried in it is a plain-language list of the specific ways a first quarterly update goes wrong. Here is our view, having read the whole thing: the risk today is not people ignoring the deadline. It is people believing they have met it when they have not. HMRC's own notes to software vendors describe exactly that failure. The taxpayer-facing communications do not mention it at all.
What HMRC told the software firms
Four items from the newsletter's live service section matter to ordinary business owners, not just to developers.
Some people cannot file at all, and it is not their fault. HMRC says it is addressing an issue affecting "a very small number of customers whose quarterly obligations were not created during sign-up". Those customers are unable to make a Q1 submission until HMRC completes corrective action, which the newsletter says was expected by the end of July. So if you have signed up, opened your software, and there is simply no obligation showing for the quarter, that is a known HMRC-side defect rather than something you have done wrong.
A submission can go through and leave the obligation open. This is the important one. HMRC tells developers to verify, before escalating anything, "that the submission covers the full quarterly obligation period", because its own analysis found cases where obligations stayed open after a period was submitted that did not cover the entire quarter. In practice: your software says sent, you get no error, and HMRC's records still show the update as outstanding. Nothing tells you.
Changing your reporting type takes time to land. Everyone is set to standard reporting automatically at sign-up — the 6 April to 5 July periods. Calendar reporting, which lines up with month ends, requires an election. HMRC's instruction to developers is to allow time for a change of reporting type to be reflected, and to make sure obligations have updated, before submitting Q1. If you switched recently and filed straight away, the update may have gone against the wrong period.
Your accountant's permission level matters. The newsletter notes that Supporting Agents have restricted API access and may receive a 403 Not Authorised response when trying to reach APIs available only to Main Agents. If your accountant is set up as a supporting agent rather than your main agent, they cannot file your quarterly update, and the failure looks like a software fault.
The silence is the problem, and it lasts until October
Here is why the open-obligation trap bites harder than it should. HMRC confirms in the same newsletter that customers who signed up from April 2026 and miss this first deadline "will receive a reminder letter from HMRC", and that those letters are scheduled to be issued from October 2026. Customers on digital communications may also get up to two reminder messages online.
So the feedback loop on a failed first update is roughly two months long. You file today, you assume it landed, and the first external signal that it did not arrives in the autumn. Everything in between feels exactly like success.
Putting real numbers on it
An illustrative example, chosen to be easy to follow rather than drawn from a client. Take a self-employed electrician whose 2024–25 turnover was £64,000, which puts him over the £50,000 line and into MTD from 6 April 2026. His 2026–27 profit comes in at £38,000.
His tax on that profit, using the 2026–27 rates, is:
- Income tax: £38,000 less the £12,570 personal allowance is £25,430, taxed at 20% = £5,086
- Class 4 National Insurance: the same £25,430 at 6% = £1,525.80
- Class 2 is treated as paid at this level of profit, so nothing to add
Total: £6,611.80, payable 31 January 2028.
Now the two penalty regimes, which people routinely merge into one and should not. Missing a quarterly update in 2026–27 costs nothing. HMRC has confirmed no penalty points are issued for late quarterly updates in this first year. From 2027–28 a points system applies: one point per missed deadline, and a £200 fixed penalty once four points are reached. There are exactly four quarterly deadlines in a tax year, so an electrician who lets every update slide through 2027–28 collects his fourth point on the May 2028 deadline and pays £200 — a single, capped, fairly modest sum.
Late payment is where the money actually is. For 2025–26 onwards, gov.uk sets out 3% of the tax owed at day 15, a further 3% of what remains at day 30, and an annual rate of 10% on the outstanding amount from day 31. On our electrician's £6,611.80 that is £198.35 at day 15, another £198.35 at day 30, and then £661.18 a year — £1.81 a day — until it is cleared.
Put those side by side and the shape of the risk is clear. The quarterly update is not, in itself, expensive to get wrong. What is expensive is arriving at 31 January 2028 with a year of uncategorised bookkeeping behind you and a bill you had no warning about. The quarterly rhythm exists to stop that happening. A quarterly update that silently never landed gives you the paperwork of the new system with none of the early warning it was built to provide.
One trap for anyone who has already filed 2025–26
The newsletter flags a repayment problem worth knowing about. A fix is being rolled out for a small number of repayment cases involving customers who submitted their return through the Self Assessment route rather than through MTD-compatible software. HMRC's advice is explicit: customers awaiting a repayment should avoid submitting additional 2025 to 2026 returns through software while their case is being resolved. If you are owed money and tempted to refile in the hope of shaking it loose, don't.
What is coming for everyone else
If your qualifying income is over £30,000 you join in April 2027, and HMRC has now said how it will tell you. Anyone submitting a 2025–26 Self Assessment return with qualifying income over £30,000 will see a message inside the online service explaining that the way they report is changing. Separately, awareness letters go out from Autumn 2026, phased through to early 2027, to the same group. HMRC has also added an SMS service on its helplines that texts callers links to the relevant guidance.
The £20,000 cohort follows in April 2028. If you are anywhere near either threshold, the useful thing to do is not to wait for the letter — the bookkeeping habit takes a quarter or two to bed in, and the letter arrives after the point where starting early would have helped. Our MTD checker gives you your start date and every deadline in about thirty seconds.
What to do before today ends
Five concrete things, in order.
- Confirm the obligation is fulfilled, not just that a submission was sent. In your software, look for the obligation covering 6 April to 5 July 2026 showing as met. A green "submitted" toast is not the same thing.
- Confirm the period you sent covers the whole quarter. 6 April to 5 July inclusive. A period that starts on 1 April or ends on 30 June leaves the obligation open, which is precisely the case HMRC told developers to look for.
- If you elected calendar reporting recently, confirm the election had taken effect before you filed. If it had not, the update went against periods you are no longer on.
- If your accountant files for you, confirm they are your Main Agent. Supporting agent access will not carry a quarterly update.
- If there is no obligation showing at all, stop trying. That is the sign-up defect HMRC described. Raise it through your software provider, whose route into HMRC is the vendor mailbox, rather than assuming the software is broken.
The full guidance sits at Use Making Tax Digital for Income Tax on gov.uk, which HMRC updated in July with new material on refunds, on people who signed up for the wrong tax year, and on adding or ceasing income sources.
What is still unresolved, and when we will know
Two things are genuinely open. The missing-obligations fix was expected to complete by the end of July, but Edition 5 did not confirm it had, and HMRC has published nothing since to say it is closed. And the scale of the open-obligation problem is undisclosed — HMRC says its analysis identified cases, without saying how many.
Both should become clearer on 28 August 2026, the publication date HMRC has given for the next edition of the newsletter, with the developer Technical Forum following on 8 September. We will be reading it. Two API versions, Individuals Capital Gains Income v2 and Individuals Reliefs v2, also retire on 16 October 2026, so anyone on older software has a second date in the diary whether they know it or not.
Where we stand
None of this is a reason to panic about MTD, and we are not going to pretend it is. The system is a better one than the annual scramble it replaces, and the first-year penalty grace is a real and sensible piece of forbearance. But the gap between what HMRC tells software vendors and what it tells taxpayers is doing nobody any favours. The vendors were told, in July, precisely how a first submission fails. The 864,000 people making that submission were told the date.
If you would rather not spend today reading API notes to find out whether your own filing worked, that is what we are for. Our Making Tax Digital service covers the sign-up, the software, the quarterly updates and the year-end return as one job, and our bookkeeping side keeps the records straight enough that each update takes minutes. If you want the background on the deadline itself, we wrote about who is in scope and why the updates are cumulative last month. And if you are simply not sure whether your update landed, tell us and we will look at it with you.