Making Tax Digital: Prepare for the second quarterly update deadline and to sign up for 2027-28

October is a big month for Making Tax Digital (MTD), whether your clients are already in it or are preparing to sign up. Existing MTD taxpayers must submit their second quarterly update by 7 November, while sole traders and landlords entering MTD in the 2027-28 tax year are being urged to start preparing now.

Second quarterly update for 2026-27

It’s now less than four weeks until the second quarterly update deadline for MTD (Saturday 7 November 2026). The update must include income and expense information for each source of self-employment or property income for the period from 6 April to 5 October (or 1 April to 30 September if using calendar update periods). Find out more about what must be included in a quarterly update. 

Although a penalty easement applies to late quarterly updates for taxpayers required to sign up to MTD in 2026/27, filing on time remains a legal obligation. You should also consider your responsibilities under Professional Conduct in Relation to Taxation (PCRT) when advising clients. We shared topical guidance on the application of PCRT to MTD for Income Tax in July 2025. You can find this in our PCRT resources. 

The penalty easement currently in place applies to quarterly submissions for 2026/27 only. It doesn’t cover the final tax return for MTD mandated taxpayers, which can’t be filed for 2026/27 until all quarterly updates have been submitted. 

Read HMRC’s guidance on sending quarterly updates. 

Preparing clients for MTD in 2027-28 tax year

Sole traders and landlords with qualifying income above £30,000 in their self assessment return for the 2025-26 tax year who are not already within MTD will be required to join from the 2027-28 tax year, unless they qualify for an exemption. Qualifying income is the total from self-employment and property before expenses and allowances are deducted. Taxpayers can now apply for exemptions from MTD for 2027-28, as explained in our previous article.

HMRC is urging affected sole traders and landlords to start preparing now by checking whether the rules apply and choosing compatible software. Early preparation will give clients more time to choose a compatible software, set up digital records, and be ready to submit quarterly updates and file their tax return using MTD. To help your clients find a software that best fits their needs, HMRC has produced guidance on how to choose a software and a software finding tool.

Agents can also sign up their clients in advance of the tax year using HMRC’s online service. Read the guidance for agents on signing up clients.

There is currently no indication that a similar penalty easement will apply to quarterly updates for taxpayers entering MTD for the first time in 2027-28, although ICAS has made representations to HMRC in support of this. 

Let us know what you think

We respond to tax consultations and calls for evidence and attend meetings with HMRC at which service levels, delays and other issues you raise with us are discussed. We welcome input from members to inform our work.