Making Tax Digital (MTD) for Income Tax is being phased in for sole traders and landlords whose qualifying gross income is above the relevant threshold. HMRC’s current timetable starts with qualifying income over £50,000 from 6 April 2026, then over £30,000 from 6 April 2027 and over £20,000 from 6 April 2028. For landlords, qualifying property income is assessed before expenses; it is not the same as taxable profit. People with more than one qualifying income source may need to consider the combined figure under HMRC’s rules.
The reporting calendar brings regular digital record keeping and quarterly updates. The usual update dates are 7 August, 7 November, 7 February and 7 May, followed by an end-of-period process and a final tax return. A quarterly update is a summary of income and expenses from digital records; it is not a separate tax payment or a replacement for settling the tax bill.
There is an important transition for late quarterly updates. HMRC says it will not charge late-submission penalty points for missed quarterly update deadlines during the 2026–27 tax year. The reporting duties still apply, and this easement should not be read as permission to ignore them. Annual return deadlines and payment obligations remain separate, and a late tax return can have its own consequences.
After the transition, the points-based system works by recording qualifying late submissions. For taxpayers within the relevant rules, a £200 penalty is generally triggered when four points are reached. Further missed filing deadlines after the threshold can lead to additional penalties. Points can expire or be reset only under HMRC’s detailed conditions, so the total should be checked against the taxpayer’s own account rather than assumed from one missed update.
Late payment is a different regime. It concerns tax that has not been paid by its due date, not a missing quarterly update. HMRC provides a first-year arrangement giving taxpayers 30 days after the payment deadline to pay or contact HMRC about Time to Pay before the first late-payment penalty applies. Interest and later penalties may still matter, and the applicable rates depend on the tax year and circumstances.
For property owners, a practical approach is to keep rental records digitally throughout the year, reconcile them regularly and note both update and payment dates. Before acting on an old article or penalty table, check HMRC’s live guidance: implementation dates and transitional details can change, and the rules for a landlord may depend on income, exemptions and other circumstances. This article is general information, not tax advice.