Making Tax Digital (MTD) for Income Tax has now become the compulsory way of handling tax filings for landlords, sole traders and self-employed individuals with a qualifying income over £50,000.
Despite this, the week before the change saw only 21 per cent of affected taxpayers registered for MTD.
It is possible that many are waiting for the first deadline before getting fully established with the next system.
As the deadline will be here sooner than you realise, it is worth understanding what you should be doing now so that you do not miss it.
What will the first deadline be for Making Tax Digital?
The first MTD deadline will be 7 August 2026.
Until then, your MTD compliance will be expected but not monitored, as the first submission is the true test of how prepared taxpayers are to make the most of the new system.
This might explain the low uptake, as many may feel that there is little that needs doing until August arrives, in much the same way that January typically sees many self-assessment tax returns being submitted.
However, it is naïve to assume that the biggest tax overhaul in decades can be left to the last minute, as there is a reason why there is a window between the obligation taking effect and the first deadline hitting.
Leaving preparations too late could see the first deadline missed and stress mounting if systems are not prepared.
Who should be preparing for Making Tax Digital now?
Technically, only the first cohort needs to be actively engaging with MTD in 2026, but there is little stopping those who are due to be affected over the coming years from getting ready now.
If your income is over £30,000, then 2027 will be your year, while 2028 will see those with a qualifying income over £20,000 pulled into scope.
The 2026/2027 tax year is the only one with no penalties for missing deadlines, meaning that this is the year where the live system can be tested without fear of reprisal.
If you prefer to be hands-on with setting up a new system, getting to grips with your obligations now may be of benefit, as your cohort will be treated more harshly with penalties impacting even your first submission deadline.
This is the tacit statement of HMRC that it is expected that subsequent cohorts will learn from those who came before.
Any concerns or issues with adopting new software can be ironed out while the penalties are not on the table, allowing you to master the new system ahead of time and relax into the steady rhythm of quarterly filings when the time comes.
The first penalty will be the regular non-payment penalty before the missed filing penalties take hold from 7 August 2027.
Whichever cohort of MTD you are in, our team can help you to understand and manage your obligations.
We can review your systems and processes while also guiding you towards the adoption of MTD-compliant software that suits your unique needs.
It is worth remembering that the first MTD deadline is in the middle of summer, so you may want to prepare ahead of time unless you are planning on completing your submission on the beach.
To take the stress out of Making Tax Digital submissions, speak to our team today.