HMRC issues alert as new 2026 deadline 'weeks away'

HMRC issues alert as new 2026 deadline 'weeks away' The taxman is urging UK residents to sign up to its new system Sole traders and landlords are confronting a crucial deadline as HMRC presses forward with its contentious transformation of the tax system. The tax authority is urgently working to dispel "myths" surrounding its Making Tax Digital (MTD) scheme after evidence surfaced that vast numbers of those impacted have not yet registered – mere weeks before their initial submission is required. In a social media post, HMRC delivered a stark reminder to the self-employed, emphasising that every three months they must utilise compatible software to submit digital records of income and expenditure. The message proceeded to clarify who is impacted. Crucially, anyone enrolled in MTD must send an update for each income source, including self-employment and property income. Millions swept into 'digital' system The reform impacts sole traders and landlords with combined turnover exceeding £50,000 annually – with HMRC estimating that 864,000 people would comprise this initial phase, all obliged to submit their first quarterly update via HMRC-approved software by 7 August. However, early indicators suggest many are being caught unprepared. Statistics reveal that just one week after the system launched, only 250,000 people had registered – and the overwhelming majority, nearly 170,000, had enrolled through tax agents and accountancy firms rather than directly themselves. Campaigners fear the actual number of those lagging behind could reach hundreds of thousands. Possibly anticipating difficulties, the Chancellor acted last year to ease the impact, revealing there would be no sanctions for submitting late quarterly updates during the 2026/27 tax year – a gesture critics interpreted as a tacit acknowledgement that the system's implementation has been disorganised. A lengthy and problematic journey Making Tax Digital isn't a recent development. The initiative was first put out for consultation in 2016, as part of HMRC's push to modernise its taxpayer data management. Some aspects of the scheme, including MTD for VAT, have been operational for years, but the income tax component has been repeatedly postponed following numerous delays owing to its complexity. Under the regulations finally coming into force this year, the era of the shoebox crammed with crumpled receipts is drawing to a close. Taxpayers brought into the system must abandon pen-and-paper record keeping and instead record every transaction digitally, submitting quarterly summaries to HMRC four times yearly rather than filing a single annual return. Officials maintain the change is intended to provide taxpayers with a clearer, more current view of what they owe. According to HMRC's own guidance, once a quarterly update has been filed, users will be able to see an estimate of their tax bill for their self-employment and property income in their software or in their HMRC online services account. The key dates The first cohort – those already trading with income above £50,000 – must have started keeping digital records from 6 April 2026. The critical dates that follow are: - August 7, 2026 – deadline for the first quarterly update - November 7, 2026 – second quarterly update - January 31, 2027 – last "old style" Self Assessment return, covering 2025/26 - February 7, 2027 – third quarterly update - May 27, 027 – fourth quarterly update - January 31, 2028 – first year-end declaration filed directly through MTD software, covering 2026/27 A second wave of taxpayers, with lower turnover thresholds, will be dragged into the system in the following two years. Penalties looming While there's a grace period for late quarterly filings this year, taxpayers have been cautioned against complacency. From next year, a new points-based penalty system comes into effect, similar to driving licence endorsements – accumulate too many points for missed deadlines, and a fixed fine follows. Accountants have urged clients not to leave matters until the eleventh hour, warning that mistakes in the first submission can cascade through every subsequent filing, since each quarterly update builds cumulatively on the previous one rather than standing alone. For now, HMRC's message to those affected is straightforward: get registered, sort out your software, and don't let August 7 catch you out.