The first quarterly update deadline for Making Tax Digital for Income Tax passed on 7 August 2026, and the next one is 7 November 2026 for the period to 5 October. The most useful thing a practice can do now is review how quarter one went, client by client, and fix the weak spots in records, communication and software connections before quarter two arrives. Small changes made in August will save a lot of chasing in late October.
Where things stand after quarter one
Sole traders and landlords with qualifying income over £50,000 on their 2024 to 2025 return have had to use MTD for Income Tax since 6 April 2026. Their first update covered 6 April to 5 July 2026 and was due by 7 August.
HMRC has said it will not apply penalty points for late quarterly updates during the 2026 to 2027 tax year. That is breathing space, not a holiday. The updates still have to be sent before the tax return can be filed, and from 2027 to 2028 a point is given for each missed quarterly deadline, with a £200 penalty once a client reaches four points. Use this year to build habits that will hold up when penalties apply.
Key dates for the rest of 2026 to 2027
For clients using standard update periods, the remaining deadlines are set out below. Since May 2026, HMRC’s guidance on quarterly updates has explained that each update automatically covers the period from the start of the tax year to the end of that quarter.
| Update | Period covered (standard) | Deadline |
|---|---|---|
| Quarter 2 | 6 April to 5 October 2026 | 7 November 2026 |
| Quarter 3 | 6 April 2026 to 5 January 2027 | 7 February 2027 |
| Quarter 4 | 6 April 2026 to 5 April 2027 | 7 May 2027 |
| Tax return | 2026 to 2027 tax year | 31 January 2028 |
Clients who chose calendar update periods have periods ending on the last day of the month (30 September for quarter two), but the deadlines are the same.
Lesson 1: record quality decides how hard each quarter is
Where quarter one was painful, the cause was usually the records rather than the submission itself. Common problems include:
- bank feeds that were connected late, or dropped out, leaving gaps
- transactions left uncategorised until the week of the deadline
- personal and business spending mixed in one account
- landlords with joint property who were unsure which share to record
- paper receipts that arrived in a bag at the end of July
Because each update is cumulative, any error in quarter one can be put right in a later update. That is helpful, but it also means a messy quarter one carries forward into quarter two unless someone fixes it. Book time in September to review and correct quarter one categorisation for any client where you had doubts.
Lesson 2: client communication needs a rhythm
Many clients are doing this for the first time, and some assumed their accountant would sort everything out at year end as before. A simple, predictable rhythm helps:
- Start of the quarter: a short reminder of what you need from them and by when.
- Two to three weeks after the quarter ends: a request for missing items, with a clear date.
- After submission: confirmation that the update has gone, plus a note on anything to watch.
HMRC has pointed out that clients see an estimate of their tax bill after an update is submitted. Some clients will be surprised by that figure, so explain in advance that it is an estimate based on the year so far, and is not a bill.
Set your internal deadline well before 7 November. If you ask for records by mid October, you have room for the clients who always run late.
Lesson 3: check every software connection and authorisation
Quarter one exposed a range of technical issues: clients signed up but not connected to the right software, agents missing from the client’s authorisation in the agent services account, and income sources set up incorrectly. Before quarter two, check each MTD client against this list:
- the client is signed up and you can see them in your agent services account
- the correct income sources (each trade and each property business) are set up
- the bookkeeping or bridging software is authorised and the connection is live
- bank feeds are working and up to date
- the client knows who sends the update: you, or them
Lesson 4: track the work, not just the deadline
A quarterly obligation for dozens or hundreds of clients is a workflow problem. Practices that coped well in August had each client’s quarter broken into steps, with an owner and a date for each step, rather than one task due on the 7th.
A simple quarter two checklist
- List every client mandated from April 2026, and any volunteers.
- Mark who submitted on time in quarter one, who was late and why.
- Fix any quarter one categorisation errors.
- Confirm software connections and agent authorisation.
- Send the records request with a mid October date.
- Chase missing records in the third week of October.
- Review, submit and confirm to the client by early November.
- Note anything to raise at the next review, such as fees.
Lesson 5: look again at fees and scope
Quarterly work takes time that an annual fee may not have covered. If quarter one showed that some clients take far more effort than expected, now is a good point to revisit the engagement letter and the fee, before the pattern repeats three more times. Be clear in writing about which tasks you do, which the client does, and what happens if records arrive late.
Frequently asked questions
When is the next MTD for Income Tax quarterly deadline?
For the 2026 to 2027 tax year, the second quarterly update is due by 7 November 2026. Using standard periods, it covers 6 April to 5 October 2026.
Will clients get a penalty for missing the August deadline?
HMRC has said it will not apply penalty points for late quarterly updates in the 2026 to 2027 tax year. The update must still be sent before the tax return can be submitted.
Can mistakes in quarter one be corrected?
Yes. Each update covers the year to date, so corrected records will be reflected in the next update you send.
Do clients still file a tax return?
Yes. Quarterly updates do not replace the tax return. For 2026 to 2027, the return is due by 31 January 2028.
How Engager helps
Engager lets you set up recurring jobs with job phases and checklists, so each client’s quarter follows the same steps with clear owners and internal deadlines alongside statutory ones. Kanban boards show at a glance which clients are waiting on records and which are ready to review.
Automated emails and reminders handle the routine requests and chasers, and the branded client portal gives clients one place to upload documents. Engager also integrates with TaxCalc, Xero, QuickBooks and FreeAgent, and engagement letters with built-in e-signatures make it straightforward to update scope and fees.
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