Who has to join and when, every quarterly deadline to 2029, what the penalties actually are, and the one thing about the first year that almost nobody has been told.

• Who joins, and when
• Every deadline to 2029
• Standard or calendar quarters
• Penalties
• What you have to do
• Where we come in

Who joins, and when

Making Tax Digital for Income Tax applies to sole traders and landlords whose qualifying income exceeds a threshold. Qualifying income means gross self-employment and property income added together, before expenses. It is not profit, and it does not include employment income, dividends or interest.

HMRC looks at the tax return filed in the January before the tax year starts.

Once you are in, you stay in. A later fall in income does not take you back out, which catches people who wind down a trade but keep letting property.

Every deadline to 2029

The rhythm never changes. Four quarterly updates, then a final declaration that replaces the old tax return. The quarterly dates are the same every year: 7 August, 7 November, 7 February and 7 May.

2026/27 — the first mandated year

2027/28 — the £30,000 cohort joins

2028/29 — the £20,000 cohort joins

Standard or calendar quarters

You can report on the tax year (standard periods) or on calendar months, and the choice usually follows your accounting date. The submission deadlines are identical either way.

If your accounts are made up to 31 March, calendar periods are simpler. If they run to 5 April, use standard periods. Your software will ask once and then remember.

Penalties

Late quarterly updates

This is where most of the anxiety sits, and where the facts are more forgiving than the noise suggests.

• 2026/27: no penalties at all for a late quarterly update. You still must send them.
• 2027/28 onwards: one penalty point per missed deadline.
• At four points, a £200 penalty, and another £200 for each later miss.

Points below the threshold drop off automatically 24 months after the missed deadline. Once you hit four, they only clear after twelve months of filing everything on time and bringing the previous 24 months up to date.

Late payment

Payment penalties are separate, and they are not points based. In your first year under the new regime you get 30 days’ grace from the due date to pay in full or agree a payment plan. After that first year the grace period is 15 days.

Late payment interest runs from day one regardless, and it is not a penalty you can appeal away.

What you have to do

• Keep digital records of business and property income and expenses — a spreadsheet alone is not enough unless bridging software connects it to HMRC
• Use MTD-compatible software
• Send four cumulative quarterly updates
• Submit a final declaration by 31 January, which replaces your Self Assessment return
• Keep paying by 31 January as before — the quarterly updates do not change when tax is due

Quarterly updates are summaries. No accounting or tax adjustments are needed before you send them, which sounds reassuring and is the source of the biggest misunderstanding — a tidy quarterly submission is not a checked one.

Where we come in

We can check whether you are actually in scope, get you registered and set up on software that suits how you work, and either file the quarterly updates for you or review them before they go.

We have written more about what we have seen in practice: why using the software correctly is not the same as getting the accounts right, and there is fuller MTD background in our March and April newsletters.