Five Filings a Year

Roughly half the people it applies to missed the first one.

On 12 August, HMRC said 436,000 sole traders and landlords had filed their first Making Tax Digital quarterly update. More than 570,000 had signed up to the service. So somewhere north of 130,000 people registered for the thing, understood it applied to them, and still didn't file it.

That gap is the interesting bit, and it isn't really about tax.

What actually changed

From 6 April 2026, sole traders and landlords with qualifying income over £50,000 have to keep digital records and send HMRC a summary of income and expenses every quarter. The first covered 6 April to 5 July and was due 7 August. The next are 7 November 2026, then 7 February and 7 May 2027.

The Self Assessment return didn't go anywhere. It's still due 31 January. The quarterly updates sit on top of it.

One annual return became five filings a year. That's the whole change, and it's permanent.

The bit that starts this month

From September 2026 — now — HMRC begins automatically signing up people who should be using the service and haven't got round to it. It's being done in stages over the coming months, and it applies to those with qualifying income of £50,000 or more in 2024/25.

HMRC's line on it is that signing up yourself means you "stay in control" — you check your details are right and you pick your own software, rather than finding out you're in it.

That's the practical difference. Not a penalty. Just the ordinary gap between choosing a system and being handed one.

The grace period is real, and narrower than people think

There are no penalty points for missing a quarterly update in the 2026 to 2027 tax year. That's genuine, and it's why nothing dramatic happened to the people who missed August.

Three things it doesn't cover. You're still required to keep digital records. The penalties for late returns and late payments are unchanged. And from the tax year you join, the points system is live: four missed deadlines is a £200 penalty, then £200 each time after.

From April 2027 the threshold drops from £50,000 to £30,000, so a lot more people join the year the points start counting.

It isn't a reprieve. It's a run-up.

Why this is an admin story, not a tax story

Once a year, you can reconstruct. Most operators do — a carrier bag, a weekend in January, a rough peace with the whole business.

Reconstruction is expensive, but you only pay it once, so it never feels like a system worth fixing. Now you pay it four more times, and it costs roughly the same each time, because the work isn't the filing — it's the archaeology beforehand.

Anything you do once a year you do slowly and badly. Anything you do every week you barely notice. That's the actual decision in front of you, and it's the same one we wrote about in The Same Thing, Twice — the repeated task that pretends to be a one-off.

Where AI automation for sole traders helps here — and where it doesn't

Straight answer: mostly it doesn't, and we'd rather say so.

The fix for this is compatible software and twenty minutes a week. It is genuinely that boring. Nobody needs a clever tool to make a quarterly summary work — they need the receipts to already be somewhere by the time the quarter ends.

Where automation earns its place is one step earlier: capture at source. The invoice raised when the job finishes rather than on Sunday night. The receipt photographed at the counter. The enquiry logged where it lands. Do that and the quarterly update is a review of records that already exist. Skip it and the update is four archaeology weekends a year instead of one.

So the test is narrow. If a tool removes the reconstruction, it's worth looking at. If it just makes the reconstruction prettier, it's a fifth filing with a subscription attached.

And don't buy anything for this until you've done four weeks of the habit by hand. You'll know what you actually need by then, and it's usually less than you'd have bought in August.

This week's homework: the four dates

Ten minutes, and it's mostly calendar work.

Check whether you're in scope — qualifying income over £50,000 in 2024/25 from self-employment and property combined. Put 7 November, 7 February and 7 May in the calendar with a week's warning on each. Then book a recurring twenty minutes, same slot every week, and treat it like a job you've been paid for.

If you're not sure whether it applies to you, ask your accountant or check GOV.UK. We build websites and the systems behind them — we're not accountants, and this isn't tax advice.

The part of this we can help with is the capture end — enquiries, quotes and jobs landing somewhere structured instead of in a phone. If that's where your week actually goes, here's how we work.

Built by operators, for operators.

— Kane & George