The 6 April Deadline Is Real This Time
HMRC confirmed in early February 2026 that Making Tax Digital for Income Tax Self Assessment (MTD ITSA) starts 6 April 2026 for sole traders and landlords with income over £50,000. No more delays. The 864,000 affected taxpayers have seven weeks to comply.
This isn't a soft launch. Digital record-keeping via MTD-compatible software becomes mandatory from day one. HMRC won't provide tools. You need to source software, test it, and train clients before the first quarterly update window opens.
What Actually Changes
Digital records and quarterly updates: Sole traders and landlords must keep digital records and submit quarterly summaries (not full returns) through approved software. The annual Self Assessment deadline of 31 January stays, but quarterly data feeds into it. Phase 2 drops the threshold to £30,000 in April 2027, pulling in roughly 3 million taxpayers long-term.
New penalty system: The flat £100 late filing penalty is out. HMRC's points-based system awards penalty points for each missed deadline. Hit two points (annual filers) or four points (quarterly filers) and you pay £200. Points reset after compliance. This starts alongside MTD on 6 April 2026.
Updated tax codes for 2026-27: HMRC issued revised PAYE codes for the new tax year to improve deduction accuracy across multiple income streams. Incorrect codes mean underpaid tax and year-end reconciliation headaches. Check client codes now, not in March 2027.
The Compliance Gap
Nearly 20% of HMRC's MTD software interfaces were untested as of late 2025, according to infrastructure reviews. That's a risk if you're switching software or onboarding new clients under tight deadlines.
Quarterly cycles compress the old annual rush into four separate events. Miss one and the points stack. The "light-touch" quarterly updates still require accurate categorisation, receipts, and reconciliation. It's lighter than a full return, not optional bookkeeping.
What To Action This Week
- Identify clients over £50,000 gross income (2024/25 tax year basis).
- Source and test MTD-compatible software if you haven't already.
- Brief clients on quarterly obligations and the penalty system.
- Review 2026-27 tax codes for PAYE clients to avoid underpayment surprises.
The first quarterly deadline for Phase 2 starters (£30,000+ threshold) is 7 August 2027. Phase 1 deadlines arrive sooner. Mark calendars accordingly.
The Bigger Picture
MTD aims to cut the tax gap and reduce errors through real-time digital reporting. Critics note the admin burden, potential cash flow shocks from quarter-end alignment changes (31 March vs 5 April), and infrastructure readiness concerns. Proponents argue it simplifies compliance once embedded.
Either way, 6 April 2026 is fixed. The work starts now.