HMRC Issues Warning as Making Tax Digital Deadline Approaches

The HM Revenue and Customs (HMRC) issued an urgent warning to 864,000 taxpayers ahead of the August 7 deadline for the first quarterly update under the Making Tax Digital (MTD) for Income Tax program. The system became compulsory in April 2026 for landlords and sole traders with qualifying incomes exceeding £50,000, requiring them to use approved software to report basic income and expenditure.

While a standard tax return and final payment remain due by January 31, the MTD system introduces a points-based penalty regime where accumulating four points triggers a £200 fine. HMRC is currently providing a 12-month transitional grace period, meaning no penalty points will be issued for late updates during the inaugural year. The program is scheduled to expand to those earning over £30,000 in April 2027 and those earning over £20,000 in April 2028.

Tax experts noted that current quarterly submissions do not trigger tax payments, though HMRC is considering reforms that could bring payment dates forward starting in April 2029. Some accounting professionals highlighted the challenges for unrepresented taxpayers and the inconvenience of the August deadline, which coincides with summer holidays.