MTD for Income Tax First Deadline Is Coming: Is Your Practice Actually Ready?

The first Making Tax Digital for Income Tax (MTD IT) quarterly update is due on the 7th of August 2026. The deadline applies to accounting practice’s self-employed clients with qualifying income over £50,000. HMRC aren’t issuing penalty points in year one but missing your first deadlines will mean practices have to catch up with the first cohort’s updates while onboarding clients in the second phase of the rollout.

This blog is part of our series, Making Tax Digital for Income Tax: Your Complete Practice Guide to Multiple Cohorts, Workflows, and Compliance.

The practices that come through this well are the ones who’ve already got the right systems in place. Here’s what having the right systems for MTD IT in place looks like.

Who’s in scope for phase one of MTD IT?

The scope for phase one of MTD IT covers sole traders and landlords with qualifying income above £50,000.

Who’s in scope for phase two and three of MTD IT?

The phase two and three rollout continues from there:

• April 2027: qualifying income over £30,000

• April 2028: qualifying income over £20,000

If you haven’t already, run a review of your client list against these thresholds now. The MTD IT clients coming into scope in 2027 need to start preparing too, and you’ve got a relatively short window to have that conversation with them.

The four MTD IT quarterly filing deadlines for 2026/27

For phase one clients who came into Making Tax Digital for Income Tax from 6 of April 2026, the four MTD IT quarterly deadlines for this tax year (2026/27) are:

What is included in each quarterly update submitted to HMRC?

Each quarterly update includes a summary of income and expenses for that period, submitted directly to HMRC through MTD-compatible software. It’s not a tax payment or tax return, but rather is a data submission that needs to be accurate and on time.

What changes for your self assessment clients?

Self Assessment clients will have to change from paper records to digital record keeping.

Paper cashbooks, folders of receipts reviewed once a year, and bank statements handed over in January are not permitted under MTD IT. Instead, digital record-keeping needs to be happening in real time (or close to real time).

For many clients, that’s a significant behaviour change. For others, it’ll be straightforward. Knowing which clients need to switch to digital record keeping, and having the right tools to support them, is what your accounting practice needs to be focused on right now.

BrightBooks: One MTD IT bookkeeping solution for every type of client

BrightBooks is Bright’s HMRC-recognised bookkeeping software, built specifically for MTD IT quarterly filing. What makes it useful for practices is that it handles every type of client from just one platform, without forcing any of them to change the way they work.

BrightCapture: the easiest way to switch clients to digital record keeping

One of the biggest blockers to MTD IT compliance is keeping records up to date. Clients forget, they lose receipts, they batch everything up at the end of the quarter and hand over a pile of paper.

BrightCapture removes that friction entirely. Here’s how BrightCapture works:

1. A client takes a photo of an invoice or receipt on their phone

2. It’s sent to a designated email address

3. BrightCapture extracts the supplier details, date, amounts, and line items automatically

4. It calculates and displays the VAT breakdown

5. The client (or your team) can make adjustments, with instant recalculation

6. Once confirmed, the entry is published directly to BrightBooks

That’s it. No manual data entry. No re-keying. No lost receipts discovered in January. The client takes a photo. The record is accurate and ready to use in their quarterly submission.

For shoebox clients, this is transformative. For any client who’s struggled to maintain digital records under earlier attempts at cloud bookkeeping, it’s a genuinely low-effort route into MTD IT compliance.

For practices with a large MTD IT client base, check out how manage 50+ MTD IT clients without expanding your team.

Your practice readiness checklist for MTD ITSA

If you haven’t already worked through these for every MTD ITSA client, do it now.

• Confirm which clients are in scope based on their qualifying income

• Make sure each client has MTD IT-compatible software in place and is actually using it

• Check that digital record-keeping has replaced any paper-based processes

• Set up your practice workflow for the four quarterly submission deadline

• Update fee arrangements to reflect the quarterly engagement model

• Identify 2027 cohort clients (income over £30,000) and start that conversation now

For further information, check out five key actions accountants need to take now for MTD IT.

MTD IT penalty points in year one

HMRC has confirmed that late submission MTD IT penalty points won’t apply to quarterly updates in the first year . That’s a useful safety net, but it’s not a reason to skip submissions or treat the August deadline as optional.

Clients need to be in the habit from this year onwards. Practices that use this year to get their Making Tax Digital workflows right will be far better placed when the penalty system does go live for the next tax year. Don’t waste the runway. For further information, check out how our practice management software can help keep your internal MTD IT processes compliant and effortless.

This content may have been developed with the assistance of AI tools. Content is reviewed by a member of the Bright team before publication. Guidance on legislation can be obtained from your industry body.