Does Making Tax Digital for Income Tax apply to limited companies?

No. It applies to sole traders and landlords with qualifying income over the threshold. Limited companies continue to file Corporation Tax returns, and company directors file Self Assessment as before.

I missed the 7 August 2026 quarterly update. Will I be fined?

Not for 2026/27. HMRC has confirmed there are no penalty points for late quarterly updates in the first year for people mandated from April 2026. Late tax returns and late payments are still penalised.

Can my accountant send the quarterly updates for me?

Yes. With FreeAgent we keep your records up to date, check the totals and submit each quarterly update to HMRC on your behalf.

Do I still need to file a Self Assessment tax return?

Yes. The four quarterly updates do not replace the tax return. For 2026/27 the return must be filed through Making Tax Digital software by 31 January 2028, and the tax paid by the same date.

Making Tax Digital for Income Tax: Who It Applies To, the Deadlines, and What to Do If Your Software Cannot File

By Trust Ledger Accounting. Figures checked against GOV.UK and last updated on 10 October 2026.

If you are a sole trader or landlord with more than £50,000 of combined self-employment and property income, Making Tax Digital for Income Tax has applied to you since 6 April 2026. You must keep digital records, send HMRC a quarterly update through recognised software, and file your 2026/27 tax return through that software by 31 January 2028. The next quarterly update is due on 7 November 2026. We handle all of it in FreeAgent from £40 + VAT a month.

Who has to use it, and from when

Qualifying income	Mandatory from	Decided by
Over £50,000	6 April 2026	Your 2024/25 Self Assessment return
Over £30,000	6 April 2027	Your 2025/26 Self Assessment return
Over £20,000	6 April 2028	Your 2026/27 Self Assessment return

Qualifying income is your turnover from self-employment plus your gross rents, added together before any expenses. Employment income, dividends, interest and pensions do not count towards the threshold. Limited companies are not affected. Source: GOV.UK, sign up for Making Tax Digital for Income Tax.

Since September 2026 HMRC has been signing people up itself, using the information it already holds. If you have had a letter or an email from HMRC about Making Tax Digital, it means you are in scope now.

The dates for 2026/27

What	Deadline
First quarterly update	7 August 2026 (passed)
Second quarterly update	7 November 2026
Third quarterly update	7 February 2027
Fourth quarterly update	7 May 2027
Tax return for 2026/27, filed through software, and the tax paid	31 January 2028

A quarterly update is a summary of your income and expense totals for each business or property source. It is not a tax return and it does not trigger a payment. You still settle your tax on 31 January and 31 July as before. Source: HMRC, quarterly updates.

Penalties

Quarterly updates in 2026/27: HMRC has confirmed no penalty points for late updates in this first year for people mandated from April 2026.
From 2027/28: each late update earns a penalty point. At four points you pay £200, then £200 for every further late submission.
Tax return and payment: the late filing and late payment penalties still apply in full, including for 31 January 2028.

The software problem: one in three products cannot file your return

Under Making Tax Digital there is no HMRC online tax return. The return must be sent from recognised software, and a place on HMRC's list of recognised products does not guarantee that a product can do that yet. An October 2026 analysis of the 128 products listed for property income, reported in the national press, found:

84 show the tax return as ready now
32 show it as "in development", which HMRC defines as a commitment to build it in time for the 2026/27 return
12 do not include the tax return at all
Only 11 of the 84 handle every other income type HMRC lists, such as bank interest, dividends and pensions

If your product only sends quarterly updates, in January 2028 you will have to re-enter a year of records somewhere else or pay for a second subscription. Check now: open HMRC's software finder, find your product and read the "tax return" line. "Ready" is fine. "In development" is a promise.

How we handle it for you

We run Making Tax Digital for sole traders and landlords in FreeAgent, which is on HMRC's recognised list, supports both sole trader and landlord accounts, and lets us submit quarterly updates on your behalf.

Service	What is included	Price (+ VAT)
Making Tax Digital monthly service	FreeAgent subscription, bank feed and digital records kept up to date (up to 50 transactions a month), and all four quarterly updates checked and submitted to HMRC	From £40 a month
Year-end tax return	The 2026/27 return prepared from your records and filed through software by 31 January 2028	£150
Software check	Tell us the name of your current product and we will check it against HMRC's list and tell you what it can and cannot file	Free

Monthly rolling, 30 days' notice, no set-up fee. If you are already behind on this year's updates we will bring the records up to date first. Send us a WhatsApp or use the form below.

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