HMRC's July 2026 MTD Checklist: What to Do Before 7 August

The first mandatory Making Tax Digital for Income Tax quarterly deadline is close. For most people using standard update periods, Quarter 1 covers 6 April to 5 July 2026 and must be sent by 7 August 2026.

HMRC's latest public guidance focuses on three foundations: authorise compatible software, check the reporting period and keep digital records. Here is the fuller practical checklist for getting from those instructions to a successful submission.

The timing matters. Research published by Lloyds Banking Group on 13 July found that 55% of affected small businesses still had preparation to do before the first deadline. The useful response is not panic. It is to identify the missing step and complete it in the right order. Read the Lloyds research.

1. Confirm that you are in the April 2026 group

You are required to use MTD for Income Tax from 6 April 2026 if the qualifying income shown by your 2024/25 tax return was more than £50,000.

Qualifying income means gross income before expenses from all your sole-trader businesses and property income sources combined. PAYE income, pensions and dividends do not form part of that test.

If you are unsure, use HMRC's official eligibility checker.

2. Sign up for MTD for Income Tax

Being registered for Self Assessment is not the same as being signed up for MTD for Income Tax. You need to complete HMRC's separate sign-up process.

HMRC says people required to use MTD in 2026/27 should sign up now. Use the same Government Gateway user ID and password that you used when registering for Self Assessment.

Follow our step-by-step MTD sign-up guide, then return to your software.

3. Authorise your software

Select Connect HMRC in your compatible software. HMRC will ask you to sign in, may ask you to confirm your identity, and will then ask you to give the software permission.

Flonancial never sees your Government Gateway password. The sign-in happens on HMRC's service and HMRC returns a secure authorisation to the software.

If the connection is refused, do not keep pressing the button. Check the sign-up and credentials first. Our HMRC connection troubleshooting guide explains the checks.

4. Check standard or calendar update periods

HMRC defaults businesses to standard periods aligned with the tax year. For Quarter 1 in 2026/27, that normally means 6 April to 5 July.

If your accounting period runs from 1 April to 31 March, HMRC says you should choose calendar update periods in your software before sending the first quarterly update. Calendar Quarter 1 runs from 1 April to 30 June.

You cannot switch the business between standard and calendar periods after its first quarterly update for the tax year. Flonancial supports both and uses the obligations returned by HMRC, but the choice still needs to be made before submission.

5. Make sure your spreadsheet contains cumulative figures

Quarterly updates are cumulative. Standard Quarter 1 contains totals from 6 April to 5 July. Quarter 2 will contain totals from 6 April to 5 October, not just the second three months.

Your digital records should contain the date, amount and category for each business income or expense. HMRC receives the summary totals, not the individual spreadsheet transactions.

Flonancial's current live journey supports the simplified quarterly route for a sole-trader business or UK property source with annual turnover under £90,000. It does not support the category-split route for a source at or above £90,000.

6. Submit each business separately

If HMRC shows more than one sole-trader business or a combination of self-employment and property, each source has a separate quarterly update. Do not combine all the figures into one submission.

Before pressing submit, check the business name, income-source type, tax year, period and cumulative totals. After submission, save the receipt and HMRC correlation ID.

7. Understand the first-year penalty easement

HMRC will not apply penalty points for late quarterly updates in 2026/27. That does not cancel the quarterly-update requirement. You still need to send all required updates before you can submit the year-end tax return.

The easement also does not remove penalties for a late tax return or late tax payment.

Your final five-minute check

• I have completed HMRC's MTD sign-up.
• My software is connected to the correct Government Gateway account.
• The business uses the correct standard or calendar periods.
• My spreadsheet contains cumulative figures to the quarter end.
• I am submitting each business or property source separately.
• The source is under £90,000 if I am using Flonancial's simplified route.
• I will save the submission receipt and HMRC correlation ID.

Read HMRC's current software-readiness guidance and quarterly-update guidance. If those steps are complete, the actual Flonancial submission should be the simplest part.