Making Tax Digital for Income Tax: 2026 to 2027 checkpoint for UK sole traders

Making Tax Digital for Income Tax started on 6 April 2026 for sole traders and landlords whose qualifying income was over £50,000 in the 2024 to 2025 tax year. If that is you, your second quarterly update is due by 7 November 2026, covering 6 April to 5 October 2026.

Everyone in Self Assessment also has the usual January deadline ahead: the 2025 to 2026 online return and any tax owed are due by 31 January 2027. And if your qualifying income is between £30,000 and £50,000, the 2025 to 2026 return you are about to file is the one HMRC uses to decide whether you join Making Tax Digital in April 2027.

Disclaimer: This is educational information for UK sole traders, not tax advice. Rules depend on your income sources and circumstances. Check the GOV.UK guidance linked below and speak to a qualified accountant or tax adviser about your position.

The 2026 to 2027 update calendar

Quarterly updates are cumulative: each one covers the tax year so far, not just the latest three months. If you chose calendar update periods instead (1 April to 31 March), your periods end on the last day of June, September, December, and March, but the deadlines are the same.

These updates sit alongside the 31 January Self Assessment deadline and the 30 December PAYE coding option. The winter 2026-27 freelance tax calendar puts every UK date from November to April in one table.

What a quarterly update is, and isn't

An update sends HMRC the totals for each income and expense category in your digital records. It does not include individual receipts or invoices. If you spot a mistake, correct your records and the fix goes into the next update.

HMRC is clear that updates are summaries, not tax returns. You still submit a 2026 to 2027 tax return through your software after the fourth update, adding adjustments, allowances, and other income such as savings interest. That return is due by 31 January following the end of the tax year, so 31 January 2028. Making Tax Digital does not change how you pay tax or when payments are due.

Penalties in the first year

• Late quarterly updates: HMRC will not apply penalty points for late quarterly updates in the 2026 to 2027 tax year. From 2027 to 2028, each missed update deadline can earn a point, and reaching 4 points means a £200 penalty.
• Late returns and payments: these still count. The new points and late payment penalties start from the tax year you join, so for someone who started on 6 April 2026 they cover the 2026 to 2027 return.
• Your 2025 to 2026 return: the current Self Assessment penalties still apply to the 31 January 2027 deadline.

The grace period is a reason not to panic if 7 November slips, not a reason to skip updates. The habit you build this year is the one you need when points start counting.

The January 2027 bill

By 31 January 2027 you may need to pay two things at once: the balancing payment for 2025 to 2026, and the first payment on account for 2026 to 2027. The second payment on account is due by 31 July 2027. Each payment on account is usually half of the previous year's tax bill. You don't need to make them if last year's bill was under £1,000, or if more than 80% of your tax was already paid outside Self Assessment, for example through PAYE.

For 2026 to 2027 profits, the self-employed National Insurance rates are:

• Class 4: 6% on profits between £12,570 and £50,270, and 2% on profits above £50,270.
• Class 2: with profits of £7,105 or more, contributions are treated as paid, so you pay nothing. Below that, you can choose to pay voluntary Class 2 at £3.65 a week to protect your National Insurance record.

If you are on Making Tax Digital, you can get an estimate of your tax bill for the year to date after each update. Use it to check that your reserve is on track for January 2028, not just January 2027.

Between £30,000 and £50,000: preparing for April 2027

If your qualifying income for 2025 to 2026 is over £30,000, you will need to use Making Tax Digital from 6 April 2027. The threshold drops again to £20,000, based on 2026 to 2027 income, from 6 April 2028.

Qualifying income is your self-employment and property income before expenses: turnover, not profit. Employment pay, your share of partnership profits, dividends, and pensions do not count. A freelancer with £34,000 of turnover and £22,000 of profit is still over the £30,000 line. HMRC says it will write to people who need to join, but if no letter arrives, checking is still your responsibility.

1. Check your turnover. Add up 2025 to 2026 self-employment and property income before expenses as you prepare the return due 31 January 2027.
2. Pick software now. Use HMRC's software finder. Some products are free for simple affairs, and bridging software can connect a spreadsheet you already keep.
3. Sort your categories. Updates are built from category totals, so start recording income and expenses in consistent categories well before 6 April 2027.
4. Consider a trial run. You can sign up voluntarily before you have to. HMRC says volunteers do not get penalties for missed quarterly updates while volunteering, though you would need to send any updates already due for the year.

What to do this month

• Already on Making Tax Digital: reconcile records to 5 October and send the second update by 7 November.
• Everyone: start the 2025 to 2026 return now, so you know the January balancing payment and payment on account well before 31 January 2027.
• Between £30,000 and £50,000: confirm your qualifying income and choose software before the new tax year.

If a late-paying client is what makes your records hard to close each quarter, the late payment checklist helps you find the blocker, and the freelance checklists library has a weekly review you can run before each update.

For the full money system behind these dates, read money, tax and bookkeeping for freelancers.

Sources

• GOV.UK: Send quarterly updates (Making Tax Digital for Income Tax)
• GOV.UK: Check if you're eligible for Making Tax Digital for Income Tax
• GOV.UK: Work out your qualifying income for Making Tax Digital for Income Tax
• GOV.UK: Penalties for Making Tax Digital for Income Tax
• GOV.UK: Penalties for Making Tax Digital for Income Tax volunteers
• GOV.UK: Sign up your business for Making Tax Digital for Income Tax
• GOV.UK: Find software that's compatible with Making Tax Digital for Income Tax
• GOV.UK: Finalise your Income Tax position
• GOV.UK: Self Assessment tax return deadlines
• GOV.UK: Payments on account
• GOV.UK: Self-employed National Insurance rates