Your First MTD Quarterly Update: The 7 August 2026 Deadline Nobody's Ready For
There's a deadline coming on 7 August 2026 that a lot of tradespeople don't know is theirs yet.
It's the first quarterly update under Making Tax Digital for Income Tax — MTD ITSA — and from this tax year it's the law for sole traders over a certain size. Most builders, sparkies and plumbers I talk to have heard the phrase, assumed it was an accountant problem, and parked it. It isn't an accountant problem. It's a records problem, and the records are yours.
The good news: if your paperwork is in order, the update itself takes minutes. The bad news: most tradespeople's paperwork is a glovebox full of faded receipts, which is exactly the thing MTD no longer accepts. So this is the plain-English version — who's in scope, what you actually have to send, what the penalties really are this first year, and how to make the whole thing a non-event.
Who this applies to
From 6 April 2026, you have to use MTD for Income Tax if your gross income from self-employment and/or property is over £50,000.
Two words there matter. Gross means your turnover — everything you invoiced — before you take any expenses off. Not your profit. A sole trader turning over £70,000 and netting £40,000 after materials, van and tools is still in scope, because the £50k test looks at the £70k, not the £40k. And the threshold is the combined total of your trade income and any rental income, added together.
It doesn't stop at £50k either. The threshold drops to £30,000 from April 2027, and to £20,000 from April 2028. Put plainly: if you're a full-time tradesperson, you're either in MTD now or you will be within two years. There's no real benefit in treating it as someone else's problem until 2028 — the habit that makes it painless takes a while to build, and you may as well build it now.
What you actually have to do
This is where the fear is worse than the reality. MTD does not mean doing your tax return four times a year. A quarterly update is a summary, not a return.
Each quarter you send HMRC, through MTD-compatible software, a running total of:
- your business income for the year so far, and
- your expenses, grouped into HMRC's standard categories (materials, vehicle costs, tools, insurance, and so on).
That's it. You don't calculate your tax, you don't claim reliefs, you don't make any decisions. It's a position update: here's what's come in, here's what's gone out. The actual working-out — allowances, reliefs, the final bill — still happens once a year in something called the Final Declaration, due by 31 January after the tax year ends, much like the Self Assessment you already know.
The dates to put in your phone
There are four updates a year, and the deadlines never change:
| Quarter covers | Update due by | |---|---| | 6 April – 5 July | 7 August | | 6 July – 5 October | 7 November | | 6 October – 5 January | 7 February | | 6 January – 5 April | 7 May |
So for the 2026/27 tax year, your first update covers 6 April to 5 July 2026 and is due by 7 August 2026. Then 7 November 2026, 7 February 2027, and 7 May 2027. Same four dates, every year, for good.
The penalties — what's real and what's eased
Here's the bit worth getting right, because there's a lot of scare-talk about it.
For the 2026/27 tax year, there are no penalties for missing a quarterly update deadline. That's a deliberate first-year easement from HMRC while everyone finds their feet. You still have to send the updates — but a late one this first year won't cost you.
From 2027/28 onwards, a points-based system kicks in: you collect a point for each missed deadline, and once you reach four points you get a £200 penalty, with another £200 for each miss after that.
But read the easement carefully, because it's narrower than people hope. It covers late quarterly updates only. It does not cover paying late. If you owe tax and pay it late, the normal late-payment penalties apply from the start: for 2026/27 there's a 30-day grace period, then 3% of the tax owed at day 15 and again at day 30, after which a second penalty builds at an annual rate of around 10% on what's still unpaid — with statutory interest charged on top. The lesson is the old one — the filing got more frequent, but it's still the paying that bites, so keep the money aside through the year rather than meeting the bill cold.
The real work isn't the update. It's the records.
Notice what every quarterly update depends on: digital records of your income and expenses, in compatible software, kept up to date as the year goes.
That's the actual change MTD makes. Paper is no longer enough on its own — you can keep it for reference, but a carrier bag of thermal receipts doesn't meet the requirement and half of them are unreadable by August anyway. A spreadsheet can work, but only with bridging software to file from. Either way, the records have to exist, digitally, before the deadline — and that's the part that catches tradespeople out.
Because the truth is the quarterly update is easy when the records are there and impossible when they're not. If you get to 6 August with a glovebox of faded slips and a vague memory of what came in, you haven't got a five-minute job — you've got a weekend of misery, and you'll probably miss things you were entitled to claim. We wrote a whole piece on what you can actually claim, and every quid of it is lost if the proof went missing.
This is exactly the same trap as paper invoices: the admin has to happen at the worst possible moment — handed a receipt outside the merchant with both hands full — so it doesn't happen at all. MTD just raised the stakes on getting it done.
How to make 7 August a non-event
The only record-keeping that works for someone on the tools is the kind that takes ten seconds and uses something already in your hand. For most tradespeople, that's their phone — and specifically WhatsApp, the one app you're in all day anyway.
That's the whole idea behind TradesOffice. You photograph a receipt and send it to Amy the second it's in your hand. She reads it, pulls out the supplier, amount and VAT, files it under the correct HMRC category, and keeps a running total. You message her to raise an invoice and it's recorded the same way. No app to download, no new number, no spreadsheet, no data entry.
The point, for MTD, is this: the records build themselves as you work. So when 7 August comes round, the income and expense figures for that quarter already exist and are already in the right categories. There's nothing to reconstruct. The deadline that's making other tradespeople sweat becomes a number that's already sitting there, ready for your software or your accountant.
MTD didn't really change what good looks like — it just made "I'll sort it in January" stop working. The tradespeople who'll find it painless are the ones whose records were already being kept the moment money moved. Everyone else is going to learn the hard way, one quarter at a time.
We covered the wider picture — software, signing up, the whole shape of it — in our main guide to Making Tax Digital for tradespeople. This piece is just the bit with a date on it. And that date is 7 August 2026.
Frequently asked questions
When is the first MTD quarterly update due? For 2026/27, the first quarterly update covers 6 April to 5 July 2026 and is due by 7 August 2026. After that it's 7 November 2026, 7 February 2027 and 7 May 2027. The four deadlines — 7 August, 7 November, 7 February, 7 May — are the same every year.
Who has to do MTD for Income Tax? From 6 April 2026, anyone with gross income from self-employment and/or property over £50,000. "Gross" is your turnover before expenses, not your profit, and it's the combined total of trade and rental income. The threshold falls to £30,000 from April 2027 and £20,000 from April 2028.
What do I have to submit each quarter? A summary — a running total of your income and your expenses by HMRC category for the year so far, sent from MTD-compatible software. Not a full return. The actual tax calculation happens once a year in the Final Declaration, due 31 January after the tax year ends.
What if I miss a quarterly deadline? For 2026/27 there are no penalties for a late quarterly update. From 2027/28 it's points-based — a point per miss, £200 once you reach four. The easement covers late updates only; late-payment penalties on tax owed apply from the start.
Do I still need paper records? You can keep paper for reference, but MTD requires digital records in compatible software. A photo of a receipt taken the day you bought it counts; a faded slip in the van doesn't.
The quarterly update is the easy part. Keeping the records that feed it — every receipt, every invoice, captured the moment it happens — is the whole game, and it's the part MTD made non-negotiable.
TradesOffice is a WhatsApp-first administration service for UK sole traders. Photograph a receipt or message an invoice to Amy and it's recorded and categorised for HMRC straight away — so your quarterly MTD figures already exist when the deadline comes. No app, no new number, no spreadsheet.
Amy starts work the moment you save her number.
No app. No new number. Register in 60 seconds and send your first message tonight.
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