I Missed My First MTD Quarterly Update: What Should I Do?

What happens if you miss an MTD quarterly update?

Nothing happens automatically. The submission sits outstanding on your HMRC record until you file it. Overdue quarterly updates appear in your HMRC online account alongside your upcoming deadlines, so you can check your position at any time.

A quarterly update is a summary of income and expenses by category. Updates are summaries, not tax returns, and you do not need to make any accounting or tax adjustments before sending one. They must be sent through HMRC-recognised software, so there is no paper form and no manual route through your HMRC account.

The practical risk is not the missed deadline itself. It is the record-keeping backlog behind it. Three months of uncategorised transactions in August becomes six months by November.

Will I get a penalty for a late MTD quarterly update?

No. There are no penalties for missing a quarterly update deadline for the 2026 to 2027 tax year. This is a one-year easement applying to quarterly updates only. From the 2027 to 2028 tax year, a missed quarterly deadline earns a late submission penalty point, and reaching 4 points triggers a £200 penalty.

Two further details are worth knowing. You can only get one penalty point per deadline, even if you have more than one business and send more than one quarterly update late. Late payment interest runs from the first day your payment is late until you pay in full, regardless of whether a penalty applies.

Anyone who volunteered for MTD rather than being mandated is treated differently again. Penalties do not apply to late quarterly updates while you are volunteering, but penalty points still apply for late tax returns, with a £200 penalty at 2 points.

How to submit a late MTD quarterly update

Catch up your digital records from 6 April 2026, then send the overdue update through compatible software. HMRC’s published steps are to authorise your software and check your accounting period, catch up and create digital records from the start of the tax year, then send the overdue quarterly update as soon as possible.

1. Check whether you are signed up. Sign in to HMRC online services. A message will confirm that you are already signed up. If no message appears, you are not signed up yet.
   
   
2. Confirm your software is recognised for Income Tax. Use HMRC’s find software tool to check software you already use or find a new product, and confirm it covers all your income sources and works with your chosen accounting period. Recognition for MTD for VAT is separate, so a product approved for VAT is not automatically approved for Income Tax.
   
   
3. Bring your records up to date from 6 April 2026: Categorise income and expenses as you enter them. Transactions left uncategorised are generally excluded from the totals your software calculates, so a partially matched bank feed can produce an incomplete update.
   
   
4. Send an update for each business: Record and correctly categorise every relevant transaction before you send the update. How software handles uncategorised transactions varies by product, so check your totals rather than assuming the figures are complete.
   
   
5. Send the update even if the period was empty: If you received no income and incurred no expenses during the update period, you must still send the quarterly update to tell HMRC. This catches out landlords with a vacant property.
   
   
6. Diary the remaining dates: so the same problem does not repeat in November.
   
   

One detail takes the pressure off getting every figure right first time. Each quarterly update covers from the start of the tax year to the end of the update period, not just the previous three months, which means you can correct your records without resending previous updates. The exception comes at year end: you may need to resend your fourth quarterly update to make corrections, to record joint property expenses left out of earlier updates, or to record Rent-a-Room income if you decide to claim the relief after the tax year ends.

Catching up three months of records while a second deadline approaches is the point at which most people hand the work over. Tax Care Accountants can set up your software, rebuild your records from April and file the overdue update. Call 0121 368 1277.

What if I never signed up for MTD in the first place?

You can still sign up yourself, and doing so before HMRC acts gives you more control. From September 2026, HMRC will sign up anyone who needs to use Making Tax Digital for Income Tax for 2026/27 and has not registered, in stages over the coming months, and will contact them afterwards through HMRC online services or by post depending on their circumstances.

The rules apply to sole traders and landlords with qualifying income over £50,000 in the 2024 to 2025 tax year who are not exempt. Qualifying income means gross income from self-employment and property combined, not profit.

There is a reason to move first. When HMRC signs someone up, it uses the information it already holds, which may not reflect changes since their last tax return. After sign-up, you must check and confirm the income records HMRC holds, which are based on your 2024/25 tax return, add any new self-employment or property income, and tell HMRC about any sources that have ceased.

Cessation changes the picture. If all your self-employment or property income sources ceased by 5 April 2026, you do not need to use the service for 2026/27. If they ceased after 6 April 2026, you must still submit a final quarterly update covering up to the cessation date, along with your 2026/27 tax return.

Exemptions are available, including for people who are digitally excluded. If HMRC has signed you up and you do not think you need to use the service, contact Self Assessment general enquiries. HMRC’s full guidance on this is on the GOV.UK page published on 24 August 2026.

When is the next MTD quarterly update deadline?

7 November 2026, covering the period 6 April to 5 October 2026.

Calendar update periods run from 1 April to 31 March and end on the last day of the month, with the same deadlines. You cannot change the update periods you are using for a tax year once you have sent a quarterly update. The Self Assessment tax return deadline remains 31 January, and quarterly updates do not replace it.

Mistakes to avoid after a missed quarterly update

• Treating the easement as permission to skip Q2. The requirement is legal, not optional, and the protection ends after this tax year.
• Assuming MTD changed when tax is paid. Reporting frequency changed. Payment dates did not.
• Buying software without checking the Income Tax listing. Check the specific product, not just the brand.
• Skipping a nil update. A period with no activity still needs reporting.
• Waiting for a letter from HMRC before acting. Overdue updates already show in your online account.