Over 860,000 UK sole traders and landlords earning more than £50,000 face their first mandatory Making Tax Digital (MTD) for Income Tax deadline on August 7, 2026. Affected individuals must submit a quarterly record of income and expenses for the first three months of the tax year using HMRC-approved accounting software.
While HMRC notes that submissions take as little as 10 minutes for prepared users, software reports from FreeAgent warn that up to 9% of eligible taxpayers are at risk of missing the cutoff due to confusion over compatible software. The update is not a full tax return, but it marks a major operational shift toward real-time digital accounting for UK small business owners, with late submissions risking eventual penalties.
