Making Tax Digital is here: the 7 August deadline, and why digital records help you get paid

If you are a sole trader or a landlord in the UK, the way you deal with HMRC has just changed, and the first real deadline is only weeks away.

Making Tax Digital for Income Tax became mandatory on 6 April 2026 for sole traders and landlords whose gross income from self employment or property is over £50,000 a year. Instead of one annual Self Assessment return, you now keep digital records and send HMRC a quarterly update through compatible software, followed by a final declaration after the year end. You can check whether and when it applies to you on GOV.UK.

The date to have in your diary right now is 7 August 2026. That is the deadline for the first quarterly update, covering 6 April to 5 July. HMRC has reported a slow start, with many people yet to register, so if this is you, it is worth sorting sooner rather than later.

It does not stop there. The threshold drops over the next two years: income over £30,000 is brought in from April 2027, and over £20,000 from April 2028. A lot more of the self employed will be pulled in over time.

The shift underneath the deadline

It is easy to read all this as just another compliance headache. But there is a bigger shift happening, and it is one worth using to your advantage.

The whole point of Making Tax Digital is that your books stop being a once a year, shoebox of receipts exercise, and become something live. Your income, your invoices and your expenses sit in software like Xero and are kept current, quarter by quarter. That is real work to set up. It is also a genuinely useful foundation.

Because once your invoicing is digital and up to date, you already have everything you need to fix the other half of the money problem: actually getting paid. The same live invoice data that feeds your quarterly update knows the moment an invoice goes overdue. That is the perfect trigger for a chase, and it is a natural next step once you are already digital.

So do not stop at compliance. If you are putting in the effort to keep digital records for HMRC, you may as well let those same records get you paid faster.

For accountants and bookkeepers

If you look after clients, MTD is both a big workload and a real opportunity. You are already moving people onto digital records and compatible software. That same moment is the ideal time to offer credit control as a value add, so your clients are not just compliant, they are getting paid on time too.

That is where Penny fits. Once a business is on Xero, Penny reads the ledger, chases overdue invoices by email and text, and calls the ones who ignore it. Digital records are the price of entry for tax now. They can also be the thing that finally gets your invoices paid.