Making Tax Digital 2026: Key Dates and Deadlines You Cannot Afford to Miss

The clock is ticking. If you're a landlord or self-employed individual earning over £50,000, April 2026 represents one of the most significant changes to UK tax compliance in decades. Making Tax Digital for Income Tax Self-Assessment (MTD for ITSA) is no longer a distant concern—it's an imminent reality that demands your attention now.

The question isn't whether you'll need to comply. The question is whether you'll be ready when the making tax digital deadline arrives. This blog will walk you through every key date and deadline for Making Tax Digital, so you know exactly what to prepare and when.

Understanding the £50,000 Threshold

The £50,000 threshold isn't as straightforward as it might seem, and getting this calculation wrong could mean either unnecessary compliance or unexpected penalties.

Here's what counts toward that threshold:

The Phased Rollout: What Happens After 2026

While April 2026 is the first major deadline, HMRC has confirmed a phased approach following the initial making tax digital deadline:

Let's take a practical example.

Sarah is a GP earning £80,000 through PAYE and owns three rental properties generating £35,000 in gross annual rent. Despite her total income exceeding £115,000, she won't be mandated for MTD in April 2026 because her qualifying business income is only £35,000. However, she should be monitoring this carefully. As her rental income might increase and the threshold is dropping in future years anyway so she might need to comply with MTD reporting.

Critical threshold determination: Your 2024/25 tax return (due 31 January 2026) determines whether you're mandated from April 2026. HMRC will use the gross qualifying income reported on that return to assess your obligation.

The Quarterly Reporting Calendar: Your New Rhythm

Once you're within MTD for income tax, forget the annual self-assessment ritual you've grown accustomed to. You'll be entering a world of quarterly submissions. Here's precisely how the making tax digital reporting will work:

Standard Tax Year Quarters

You also have Calendar Quarter Election

You can elect to use calendar quarters instead, which means your periods would be:

The key advantage of calendar quarters is they align better with standard accounting periods. However, the submission deadlines remain identical regardless of which option you choose. This election must be made before your first submission and can only be changed at the start of a new tax year.

The Final Declaration: 31 January Deadline

After completing your four quarterly updates for each income source, you must submit your Final Declaration by 31 January following the end of the tax year. For the 2026/27 tax year, this means 31 January 2028.

It brings together everything you’ve reported throughout the year, including all business and/or property income from your quarterly updates, any required accounting or tax adjustments (such as capital allowances or overlap relief), and all non-business income like employment, pensions, investments, or capital gains. It’s also the point where you claim relevant reliefs and allowances and calculate your final tax bill for the year.

Sign-Up Recommendations and Timing

For individuals mandated from April 2026, here are practical recommendations, better if followed. You can sign up now through your Government Gateway account if you want to start early.

Suggested sign-up window: Ideally by early 2026, such as January, to give yourself time to get comfortable with the process.

Minimum sensible timing: Make sure you're fully set up before your first quarterly update is due in August 2026.

While you technically could wait until shortly before your first submission, doing so would leave little time to prepare, choose software, and resolve any setup issues. Most taxpayers will benefit from signing up early to test systems and establish smooth processes well ahead of the mandate.

The Penalty Structure: Understanding the Two-Tier System

HMRC has introduced a completely new points-based penalty regime for MTD that works differently depending on whether you're a voluntary participant or a mandated taxpayer. This distinction is crucial because it affects how and when penalties apply to you.

Penalties for Voluntary MTD Participants

If you voluntarily sign up for MTD before you're mandated (the pilot or public beta testing phase), HMRC offers significant penalty relief to encourage early adoption:

Quarterly Update Penalties for Volunteers:

• No penalty points for late quarterly updates during the voluntary testing phase

• No financial penalties (£200 fines) for late quarterly submissions

• This penalty exemption applies throughout your voluntary participation period

Final Declaration Penalties for Volunteers:

• Late annual submission will incur penalty points and financial penalties as per the rules

• Volunteers must file their Final Declaration on time or face standard penalties

• This is subject to the normal annual submission penalty regime (two-point threshold)

Penalties for Mandated MTD Users (From April 2026)

Once you're mandated into MTD (from 6 April 2026 for those earning over £50,000), the full penalty regime applies to all submissions:

How points accumulate:

• You receive one penalty point for each late quarterly update

• You receive one penalty point for a late Final Declaration

• Points accumulate on separate tracks for quarterly vs annual submissions

When penalties are charged - Quarterly Updates:

• Penalty threshold: Four points

• First penalty: £200 when you reach four points

• Subsequent penalties: £200 for each additional late quarterly submission after reaching the threshold

When penalties are charged - Final Declaration:

• Penalty threshold: Two points

• First penalty: £200 when you reach two points

• Subsequent penalties: £200 for each additional late Final Declaration

How Points Expire - For Mandated Users

Below the threshold: If you haven't reached the penalty threshold (four points for quarterly, two points for annual), points expire after 24 months from the month after they were received.

After reaching the threshold: If you've reached the penalty threshold and incurred a £200 penalty, your points don't automatically expire after 24 months. Instead, you must demonstrate good compliance for a specified period:

• For quarterly obligations: Submit all four quarterly updates on time for 12 consecutive months

• For annual obligations: Submit your Final Declaration on time for 24 consecutive months (two consecutive years)

Only after completing this compliance period AND catching up on all outstanding submissions from the previous 24 months will your points reset to zero.

Example of the reset requirement: You reach four points for quarterly submission in November 2026 and receive a £200 penalty. To reset to zero points, you must:

1. Submit all quarterly updates on time from December 2026 through November 2027 (12 months)

2. Ensure all submissions due in the previous 24 months have been filed

3. Only then will your points reset to zero

Late Payment Penalties - Applies to All MTD Users

The penalties for late payment of your tax liability are separate from late submission penalties and apply equally to both voluntary and mandated users:

First penalty - 3% of unpaid tax: Applied 15 days after the payment due date

Second penalty – Additional 3% of unpaid tax: Applied 30 days after the payment due date (this is additional, not cumulative, so you're paying 3% + 3% = 6% total by day 30)

Third penalty - 10% per annum: Applied daily from day 31 onwards on any remaining unpaid tax

Plus, interest: A standard interest rate applies to all outstanding amounts from the original due date until payment

These late payment penalties apply from day one of MTD implementation, regardless of whether you're a volunteer or mandated user.

Importantly, this first-year grace period is not available to volunteers who transition to mandatory status in 2027 or later and mandated taxpayers under MTD, they immediately face full quarterly penalties.

Record-Keeping Requirements and Penalties

Beyond submission deadlines, MTD introduces specific requirements for how you maintain records. You must keep digital records using MTD-compatible software. While spreadsheets can be used, they must be digitally linked to MTD software—manual copying of figures from spreadsheets into submission software won't comply.

Your digital records must include:

• Date, amount, and category of each income and expense item

• Digital links between software components (no manual copying)

• Records maintained throughout the year, not reconstructed later

HMRC guidance and accounting sources indicate:

• Penalties can be up to £3,000 for failing to keep records digitally or using non-compliant software.

Special Circumstances and Exemptions

Some individuals may qualify for exemption from MTD:

If you're currently exempt from MTD for VAT due to digital exclusion, your exemption will automatically extend to MTD for ITSA.

However, exemptions are rare and require solid evidence. Don't assume you'll qualify, plan for compliance unless you receive written confirmation of exemption.

Leaving MTD: The Three-Year Rule

Once you're mandated into MTD, you don't automatically exit if your income drops below the threshold. You must have three consecutive years where your qualifying income falls below the relevant threshold for that respective year before you can leave MTD.

This means if you're mandated in 2026/27 because your 2024/25 income exceeded £50,000, even if your income drops to £35,000 in subsequent years, you remain in MTD. You need three full years below the relevant threshold to exit the system.

The Bottom Line: Act Now

April 2026 isn't approaching—it's accelerating toward you. Your first quarterly deadline of 7 August 2026 is just four months after the system goes live, leaving no grace period for late starters.

The calendar is unforgiving. The deadlines are fixed. The penalty system is unambiguous. The only variable is your level of preparation.

The April 2026 deadline will arrive whether you're ready or not. HMRC will expect you to be compliant from day one. The question isn't whether you'll comply. The only question that matters is whether you'll be ready—or whether you'll be scrambling, stressed, and facing penalties because you left it too late.

Choose wisely. The clock is ticking.