Key takeaways:
- Around 400,000 self-employed workers and landlords have missed MTD’s first deadline, according to the ACCA
- No penalties apply for now, thanks to the soft landing which is currently in place
- If you’re eligible for MTD, you should still register with the system and submit an update to avoid future fines
Making Tax Digital’s (MTDs) first quarterly deadline passed on the 7th of August. If you missed it, you’re in good company, with the Association of Chartered Certified Accountants (ACCA) estimating that around 400,000 self-employed workers and landlords are yet to submit updates.
For those that did miss the Making Tax Digital deadline: the good news is that there are no penalties (yet). This is due to the government’s one-year ‘soft landing’ period which shields taxpayers from late-filing penalty points on their first year of updates.
However, instead of burying your head in the sand, there are important steps you should take to getting caught out by HMRC in the future. We break down what you can do now, and how not to miss the next one.
MTD first quarterly deadline has passed, and almost half of sole traders missed it
Love it, or (more likely) hate it, MTD became mandatory for self-employed workers and landlords earning over £50,000 from the 6th of April 2026.
The system replaces the old annual tax return with quarterly digital updates on income and expenses submitted through HMRC-approved software, and is part of a wider push by the government to modernise the tax system.
The first official update was due on the 7th of August, catching around 400,000 out of the 850,000 taxpayers that are mandated to join the scheme, according to new estimates from the Association of Chartered Certified Accountants.
This leaves over half of the mandated cohort without live compliance, ahead of what’s being described as the biggest tax reform in a generation. Missing this deadline won’t result in immediate penalties, though, due to HMRC’s 12-month soft landing period, which is designed to give people breathing room when they get to grips with the new process.
However, according to ACCA senior technical advisory manager Yogesh Dhanak, this grace period shouldn’t be misunderstood as a carte blanche – other penalties may still apply.
“While HMRC has confirmed a 12-month soft-landing period where late filing points won’t be issued for these initial quarterly updates, taxpayers must not treat this as a free pass,” Dhanak explains.
“HMRC can still penalise businesses for failing to keep digital records or for deliberately withholding information.”
If you’re a sole trader or landlord, these findings shouldn’t come as too much of a shock. Recent surveys have found MTD is so unpopular it’s driving 45% of self-employed workers to consider quitting the business model altogether.
However, if you do remain as sole-trader and landlord, here are the steps you should take if you missed the deadline.
Accounting expert explains the six steps you should take if you missed the deadline
This week, Startups.co.uk spoke to accounting expert Dan Heelan, who provides weekly accounting advice to more than 70,000 subscribers, about the quarterly filing deadline
“If a sole trader has missed their first filing deadline, firstly don’t panic! There are no penalties currently for this as part of HMRC’s ‘soft landing’ approach” Heelan explains.
“However, to avoid getting further behind they should start keeping digital records in some accounting software that’s MTD compatible” he continued. “The biggest hurdle will be getting a digital book-keeping system up and running. For many people they might only be used to paper or a simple spreadsheet, which no longer works under Making Tax Digital.”
Dan’s six-step plan to becoming MTD-compliant:
- Research software options (everything from a spreadsheet style entry to a full accounting cloud software package)
- Select / buy your software
- Sign up to MTD with HMRC
- Connect your software to MTD
- Start book-keeping in the new system
- Once complete, click the submit button on your quarterly update!
If you’d like to know the ins and outs of Making Tax Digital in a little more detail, check out Dan’s guide:
7th of November: save the date now
Looking ahead, the best way to avoid repeating this mistake is to be aware of MTD deadlines. They fall on the 7th of the month, immediately following the end of each three-month reporting period.
It’s also recommended to establish digital record-keeping into your routine. By doing this, you’ll spend less time stressing before each quarterly deadline, and reduce the risks of future compliance risks.
HMRC-approved software like Xero or QuickBooks offer low-cost or free plans for smaller sole traders and landlords, with useful features like automatic bank feeds and built-in reminders that flag deadlines before the day.
Hopefully now you know that missing the first MTD deadline isn’t the end of the world. However, getting on track with compliance now could save you a lot of hassle in the future – especially after penalty points start being rolled out from 2027/2028.
The post The first MTD filing deadline has passed. Here’s what to do if you missed it appeared first on Startups.co.uk.
