You missed 7 August: what happens now

Nothing, in penalty terms — for this tax year only

HMRC's penalties guidance states, in terms: there are no penalties for missing a quarterly update deadline for the 2026 to 2027 tax year. That is not an interpretation, a concession being negotiated, or an accountant's opinion. It is the published position.

It is a one-year waiver, and it is narrower than the way it gets repeated. It covers late quarterly updates, in one tax year. It does not cover your tax return, it does not cover late payment, and it does not remove the obligation to file the update at all.

What the waiver does not touch

• Your tax return. See section 2 — this is the part that catches people.
• Late payment. Late payment penalties and late payment interest run as normal. Nothing is charged up to 15 days late; after that the percentage charges start.
• The obligation itself. HMRC's guidance is explicit: "You will need to send your quarterly updates before you are able to submit your tax return." A missed update is a blocked tax return later, not a cancelled one.

Due 31 January 2028, and not waived

Late submission penalties under Making Tax Digital are points based. The regime is Schedule 24 to the Finance Act 2021 — "Penalties for failure to make returns etc" — which covers returns required under regulations made under paragraph 7 of Schedule A1 to the Taxes Management Act 1970, i.e. the MTD returns.

HMRC's guidance sets the threshold plainly: "The penalty point threshold is 4 points. If you reach this, you'll get a: £200 penalty [and] £200 penalty each time you miss another submission deadline." Schedule 24 fixes the amount in the same terms: "The amount of a penalty under this paragraph is £200."

So the honest version, which is not the version doing the rounds: the 2026 to 2027 waiver stops your late quarterly updates earning points this year. It does not lift your 2026 to 2027 tax return out of the points system. That return is due 31 January 2028 and a late one is a points event.

One late return does not by itself produce a £200 bill — the threshold is 4 points. What it produces is a point on your record and a shorter distance to the threshold once quarterly updates start carrying points too, from the 2027 to 2028 tax year.

What HMRC announced on 12 August 2026

In its news release of 12 August 2026, HMRC said: "From September 2026, HMRC will begin signing up customers who should be using MTD for the 2026 to 2027 tax year but have not yet done so, helping them meet their requirements. This will happen in stages over the coming months."

The same release said: "New guidance will be published in late August to explain what customers need to do if they receive a letter from HMRC about being signed up." That guidance was published on 24 August 2026, and as promised we link it rather than paraphrase it: Check what to do if HMRC has signed you up for Making Tax Digital for Income Tax (checked 2 September 2026). It confirms that your overdue and upcoming quarterly updates are listed in your HMRC online account, and states that you will not get penalty points for missing a quarterly update deadline in the 2026 to 2027 tax year — but that points still apply for missing the tax return deadline.

The numbers HMRC has published, on the dates it published them:

These are three HMRC figures measuring three different things on two different dates. We have not subtracted them from one another to produce a headline "how many are non-compliant" number, because that subtraction is not something HMRC has published and the figures are not on a common basis.

Why signing yourself up is better than being signed up

HMRC's own stated reason: sign up yourself and you can make sure your MTD details are correct from the start, choose the software that suits you, and prepare in your own time rather than waiting to be contacted. Being signed up does not change what you owe or when you pay it. It changes how you report.

Not in Making Tax Digital at all

• Qualifying income of £20,000 or less. Automatic exemption. You do not apply and you do not contact HMRC.
• No National Insurance number before the start of the tax year. Automatically exempt, and you cannot sign up for that year.
• Partnerships. Partnerships do not currently need to use MTD for Income Tax.
• Trusts (SA900), including charitable trusts, and non-resident companies (SA700).
• Personal representatives of someone who has died.
• Where a power of attorney, or a legally appointed deputy, controller or guardian, is in place.

Not in for 2026 to 2027 — but in from 2027 to 2028 if you are over £30,000

If your 2024 to 2025 return included any of these: averaging relief (farmers, market gardeners, and people who personally create literary or artistic works), qualifying care relief (foster and kinship carers), an SA107 page (income from trusts or estates), or an SA109 page (residence and remittance).

Not in beyond April 2027

• Ministers of religion (SA102M), of any faith or denomination.
• Lloyd's members with self-employment or property income (SA103L).
• Anyone who received or transferred Married Couple's Allowance (for those born before 6 April 1935) or Blind Person's Allowance on their 2024 to 2025 return.

The two things people get wrong about the threshold

It is gross, not profit. Qualifying income is total income from self-employment and property before expenses — turnover. A landlord whose rent is over the threshold is in MTD even if the costs leave almost nothing behind.

Foreign property counts, and HMRC's own checker does not ask about it. HMRC's qualifying income guidance counts UK and foreign property income for a UK resident. HMRC's eligibility checker tool was updated on 3 February 2025 to confirm that the tool will not ask about foreign income. If you have overseas rental income, the tool can tell you that you are out when the guidance says you are in.

Planner that does ask about foreign property → Threshold checker →

If you genuinely cannot use digital tools

There is a digital exclusion exemption, and there is no online form for it. You call or write to HMRC using the contact details in Self Assessment: general enquiries; an authorised agent, or a friend or family member with your authorisation, can apply for you. HMRC says it aims to respond within 28 calendar days, longer if it needs more information. A refusal letter explains why and how to appeal within 30 days. If you are exempt for 2026 to 2027 you stay on the current Self Assessment late payment and late filing penalties.

The digital exclusion route in full → Every exemption →

Six steps

1. Confirm you are in scope using section 4 above. If you are automatically exempt, stop here — there is nothing to catch up on and nothing to buy.
2. Choose compatible software before you sign up. Only software on HMRC's recognised list can send an update. Bridging software that files from a spreadsheet counts, and is usually the cheapest route if your records already live in a spreadsheet.
3. Sign up at GOV.UK. Free. You need your Self Assessment user ID and password, and your business start date or the date you started receiving property income if that was within the last two tax years; sole traders also need business name, address and nature of business. You may have to verify your identity. If you use an agent, they can sign you up instead through a separate agent route.
4. Get your digital records straight for the whole tax year so far — from 6 April 2026, or 1 April 2026 on calendar periods. Not from today. Bank-feed imports usually need categories added and missing transactions created.
5. Send the missed update. HMRC's sign-up guidance is explicit that you use compatible software to send any missed quarterly updates for the year so far. Because updates are cumulative, this is normally one submission, not two.
6. Put 7 November 2026 in the calendar and use the tool below to check exactly what that update has to cover. It is not July to September.

Signing up for MTD is free at GOV.UK. We are not HMRC, cannot sign you up, and charge nothing for anything HMRC provides free.

The limits of this page, stated plainly

• HMRC's promised late-August guidance on the sign-up letters is out — published 24 August 2026, read 5 September 2026, and linked in full above rather than paraphrased. What we still cannot tell you is what any individual letter says about YOUR record: the guidance describes the process, not your account.
• We publish no estimate of how many people are non-compliant. Three HMRC figures on two dates measuring different things do not subtract into one.
• This page does not model jointly-owned property, ceased businesses, accounting periods shorter than 12 months, or an in-flight digital exclusion application.
• Everything here is general information about published rules. If your position is genuinely marginal, that is the point at which an accountant is worth the money.

I missed the 7 August 2026 MTD deadline — what is the penalty?

For the 2026 to 2027 tax year there are no penalties for missing a quarterly update deadline. HMRC's penalties guidance states there are no penalties for missing a quarterly update deadline for the 2026 to 2027 tax year. The waiver removes the penalty, not the obligation: you still have to send the update, and you cannot submit your tax return until your quarterly updates are sent.

Is the 2026 to 2027 tax return covered by the first-year penalty waiver?

No. The waiver covers late quarterly updates for the 2026 to 2027 tax year only. Your 2026 to 2027 tax return, due 31 January 2028, sits in the points-based late submission regime in Schedule 24 to the Finance Act 2021. The penalty point threshold is 4 points, and reaching it gives a £200 penalty, with a further £200 for each later missed deadline.

Will HMRC sign me up to Making Tax Digital automatically?

HMRC said on 12 August 2026 that from September 2026 it will begin signing up customers who should be using MTD for the 2026 to 2027 tax year but have not yet done so, in stages over the following months. Signing up yourself first means you choose the software and check your details are right.

What period does my second MTD quarterly update cover?

From the start of the tax year to the end of the second period — 6 April to 5 October on standard update periods, or 1 April to 30 September on calendar periods. Not July to September. Quarterly updates are cumulative, and the second update is due 7 November.