HMRC is reminding self-employed individuals to meet their tax obligations or risk facing penalties of up to £900. The upcoming changes under Making Tax Digital (MTD) will introduce a shift in how tax information is submitted, replacing annual filings with more frequent quarterly updates.
According to GB News, these reforms are part of a wider government initiative to modernize tax reporting and increase compliance. While the main rollout is scheduled for April 2026, certain requirements and deadlines will already come into effect next year, meaning some taxpayers must prepare sooner than expected. This represents a notable change from the current system.
New Quarterly Reporting Rules From April 2026
The reforms represent a fundamental change in how HMRC manages tax obligations, moving away from traditional annual submissions to a more frequent digital reporting system. This means that self-employed workers and property landlords earning over £50,000 annually must submit quarterly updates to HMRC rather than a single yearly return.
This change replaces the traditional January rush for yearly tax returns. The first quarterly reporting period will cover April 6 to July 5, with the deadline on August 7, leaving little room for error.
Robert Jones, proprietor of Swift Tax Refunds and a practising accountant, explained to Accountex:
From April 2026, self-employed individuals and landlords earning over £50,000 will need to start submitting quarterly updates to HMRC under Making Tax Digital. The initial quarterly deadline will arrive swiftly, with the first submission covering the period from April 6 to July 5 due by August 7. This compressed timeline leaves little margin for error.
Accountants Express Concern Over Readiness
According to findings from Accountex, four in five accountants identify Making Tax Digital as their most significant professional challenge in the year ahead. One third of accounting professionals say they feel ill-equipped for the approaching deadline, and one in ten describe themselves as severely underprepared.
Jones noted:
The shift from yearly returns to quarterly updates represents a big change requiring consistent digital record-keeping throughout the year.
For those earning from multiple sources, analysts warn the process will be even more complex, as separate records and quarterly reports will be required for employment income and property income.
Penalties for Missing Deadlines
Those who fail to meet the new requirements face substantial financial consequences. Missing a deadline will trigger an immediate £100 fine, with daily charges of £10 starting after three months, potentially reaching £900.
Jones cautioned:
Failing to file a return on time results in a £100 fine straight away. If the return is still outstanding after three months, daily £10 penalties start to add up, reaching up to £900.
Further penalties apply at six months, with HMRC imposing either £300 or 5% of the outstanding tax, whichever is greater. This charge is repeated at the twelve-month mark. Deliberate non-compliance can lead to even harsher sanctions.
Paying on time remains essential, even if all submissions are made by the deadline. Late payment incurs a 5% penalty after one month, with further 5% penalties at six and twelve months. Interest accrues continuously from the original due date.
