HMRC MTD for Income Tax Quarterly Updates Reach 436000 Milestone

More than 436,000 sole traders and landlords have now sent their first Making Tax Digital for Income Tax quarterly update for the 2026 to 2027 tax year, marking a major step in HMRC’s move towards digital tax reporting.

HMRC says more than 570,000 customers have signed up to the service so far. The first quarterly update covered the first three months of the tax year, following the start of mandatory Making Tax Digital requirements in April 2026 for those with qualifying income over £50,000.

For anyone who has not yet sent their first update, the key message is simple: it can still be done now through recognised software, and no penalty points will be issued for late quarterly updates during the 2026 to 2027 tax year.

Digital records are now part of routine tax admin for many sole traders and landlords.

The 436,000 figure shows MTD is moving from policy to practice

The latest figures show that Making Tax Digital for Income Tax has moved beyond preparation and into day-to-day use. Hundreds of thousands of people have now completed the first reporting step under the new rules.

The update applies to sole traders and landlords who meet the income threshold and are in scope for the 2026 to 2027 tax year. Since April 2026, those earning more than £50,000 from self-employment and property have had to:

• keep digital records

• use compatible software

• send quarterly updates to HMRC

• continue to meet Self Assessment obligations

  
  

The quarterly update is a short summary of income and expenses sent through recognised software. It is not the same as a tax return, and it does not set the final tax bill by itself.

This distinction matters. The quarterly update gives HMRC a more regular picture of business or property income during the year. The Self Assessment tax return still pulls the full tax position together after the tax year ends.

The Self Assessment deadline remains 31 January.

Late quarterly updates will not receive penalty points this year

HMRC has confirmed that no penalty points will be issued for late quarterly updates during the 2026 to 2027 tax year. That gives people who missed the first deadline time to catch up without facing that specific penalty.

That does not mean all tax deadlines can be ignored. Penalties still apply for late Self Assessment tax returns and late tax payments.

The safest approach is to treat this first year as a chance to get the process working properly. That means checking software, making sure records are complete, and sending updates as soon as possible rather than letting several quarters build up.

For many sole traders and landlords, the practical task is less dramatic than it may sound. If records are already kept digitally, the quarterly update should usually be a short submission from within compatible software.

Good records make each quarterly update easier to complete.

HMRC will start signing up some customers from September 2026

From September 2026, HMRC will begin signing up customers who should be using Making Tax Digital for Income Tax for the 2026 to 2027 tax year but have not yet done so.

This will happen in stages over the following months. HMRC has said new guidance will be published in late August to explain what people should do if they receive a letter about being signed up.

People who sign up themselves before HMRC contacts them may have more control over the process. They can check that their details are correct from the start and choose software in their own time.

That can reduce the risk of small errors becoming larger problems later. For example, a sole trader may need to check that the right business is linked. A landlord may need to make sure property income is recorded in the correct place.

Signing up early also gives more time to get used to the software before the next update is due.

What quarterly updates do and do not change

Quarterly updates are one of the biggest practical changes under MTD for Income Tax, but they do not replace the whole tax return process.

They are designed to be regular summaries, not final declarations. The figures may later be adjusted or completed through the end-of-year Self Assessment process.

Quarterly updates	Self Assessment tax return
Sent during the tax year	Submitted after the tax year ends
Cover income and expenses for the quarter	Brings together the full tax position
Sent through compatible software	Deadline remains 31 January
Required for those in scope	Still required where applicable

Those in scope will need to send their quarterly updates so they can submit a tax return. In other words, the new reporting steps sit alongside the existing Self Assessment timetable.

Quarterly reporting adds new dates to the tax year, but Self Assessment remains in place.

The next threshold arrives in April 2027

MTD for Income Tax became mandatory from April 2026 for sole traders and landlords with qualifying income over £50,000. From April 2027, the requirement will extend to those with qualifying income over £30,000.

That staged approach means more people will come into the system over time. The latest milestone gives a first sign of how the process is working at scale.

For those already within the £50,000 threshold, the priority is to get signed up, keep records digitally, and send any outstanding quarterly update. For those likely to fall within the £30,000 threshold from April 2027, now is a useful time to start thinking about record-keeping habits and software choices.

No one needs to wait until a deadline is close to prepare.

What to do now if the first update has not been sent

Anyone who should be using MTD for Income Tax but has not yet sent the first quarterly update can still act now.

The main steps are straightforward:

• check whether the MTD rules apply

• sign up through GOV.UK if not already signed up

• choose recognised compatible software

• make sure digital records are complete

• send the quarterly update through the software

  
  

HMRC has said customers who have not yet sent their update can do so in a few simple steps through their recognised software.

The benefit of acting now is control. Waiting until HMRC signs someone up from September may make the process feel less manageable, especially if details need checking or software still needs choosing.

A short checklist can help make the first MTD update feel more manageable.

A milestone, but also a reminder

The HMRC MTD for Income Tax quarterly updates milestone shows that large numbers of sole traders and landlords have already managed the first submission. It also signals that HMRC is moving into the next phase, contacting and signing up those who are in scope but have not yet joined.

The practical takeaway is clear. If the rules apply and the first update has not been sent, there is still time to do it without late quarterly update penalty points for this tax year.

This article is for general information only and is not tax advice. Anyone unsure about their position should check GOV.UK guidance or speak to a qualified tax adviser.