Landlords and sole traders warned over HMRC deadline as new tax rules begin
HMRC says late quarterly updates bring no first-year fines, but penalties start in year two and 864,000 taxpayers are in scope.
- Around 864,000 sole traders and landlords must submit their first Making Tax Digital report to HMRC by tomorrow, August 7. This new reporting system is a legal requirement for those earning more than £50,000 annually.
- The Government's Making Tax Digital for Income Tax programme requires affected taxpayers to use HMRC-compatible software to submit quarterly updates. The first phase targets individuals earning more than £50,000 from self-employment or property income.
- Elsa Littlewood, a tax partner at BDO, noted the deadline falls at an "inconvenient time" for many taxpayers. She warned unrepresented taxpayers may find the process challenging, though explanatory materials are available on the Government website.
- Although HMRC will not issue penalties for late quarterly updates during the first year, a points-based system will apply thereafter. Once four penalty points accumulate, HMRC will issue a £200 fixed penalty with further consequences possible.
- The scheme will expand to those earning more than £30,000 from April 2027 and £20,000 from April 2028. Littlewood warned HMRC may eventually align tax payment demands with quarterly reporting deadlines, potentially adding further complexity.
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Landlords and sole traders warned over HMRC deadline as new tax rules begin
Around 864,000 sole traders and landlords must submit their first Making Tax Digital report to HMRC by August 7 2026. Here's who is affected.
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