Missed the 7 August MTD update or the 31 July payment on account?

Published 24 July 2026. Updated 17 August 2026.

Two HMRC deadlines fell within a fortnight of each other this summer, and both have now passed. The second payment on account was due on 31 July. The first ever Making Tax Digital quarterly update was due on 7 August. Here is what each one was, and what to do if you missed either.

If you missed 7 August, the fix is simpler than it looks, because quarterly updates are cumulative and your next one clears it. See why the 7 November update fixes a missed 7 August.

7 August 2026: the first Making Tax Digital update

This had never happened before, which is precisely why it was missed.

Making Tax Digital for Income Tax went live on 6 April 2026 for sole traders and landlords with qualifying income above £50,000. Those affected must keep digital records and send HMRC a summary of income and expenses every three months.

The first quarterly update covered 6 April to 5 July 2026 and was due by 7 August 2026. If you use calendar quarters instead, yours covered 1 April to 30 June and fell on the same date. HMRC wrote to more than 864,000 sole traders and landlords about it.

After this, the standard quarters end on 5 July, 5 October, 5 January and 5 April, each due roughly a month and a week later. The next deadline is 7 November 2026.

The threshold is misread constantly

The £50,000 is gross income, not profit. It is your total invoiced turnover before a single allowable expense comes off. Plenty of freelancers with profits well under £50,000 are inside the rules and do not realise it. If you have both self-employment and property income, they are combined for the test.

It is also decided by a past return rather than your current year. Entry from April 2026 was set by the qualifying income on your 2024-25 Self Assessment return, the one filed by 31 January 2026.

Two things worth knowing

There is a soft landing. HMRC will not apply late submission penalty points for quarterly updates during the first year of MTD for Income Tax. Missing 7 August is not a disaster, but the digital records still have to exist and the update still has to be filed.

Quarterly updates do not replace your tax return. They are summaries, not filings. Your Self Assessment for 2025/26 is still due by 31 January 2027, and from 2026-27 the return itself is filed from your MTD software, by 31 January 2028.

It widens from here

The threshold drops to £30,000 in April 2027 and £20,000 in April 2028. If you were not caught this year, there is a good chance you will be within two.

31 July 2026: second payment on account

If you file a Self Assessment return, your second payment on account for the 2025/26 tax year was due by midnight on 31 July 2026.

Each payment on account is normally half of your previous year's tax bill. A £6,000 bill last year means two payments of £3,000, one in January and one at the end of July. It is not an extra tax, it is an advance on what you will owe.

If you missed it

Interest runs, but no penalty applies. This is the part most people get wrong, in both directions.

HMRC charges late payment interest from the day after the deadline at 7.75%, the rate in force since 9 January 2026 and set at the Bank of England base rate plus 4%. It accrues daily until the balance clears, and it does not compound.

What does not happen is a late payment penalty. The 5%, 6-month and 12-month penalties apply to your 31 January balancing payment, not to a payment on account. Missing 31 July costs you interest and nothing else. That is not a reason to leave it, but it is a good deal less alarming than the January position, and worth knowing before you panic.

Pay as soon as you can to stop the interest running. If you genuinely cannot, contact HMRC and ask about a Time to Pay arrangement. A conversation started by you lands very differently from a payment that simply never arrived.

If this year is leaner than last

You can ask HMRC to reduce your payments on account using form SA303, online or by post. Be careful with the estimate: if you reduce it too far and your actual liability comes in higher, HMRC charges interest on the shortfall backdated to the date the original payment was due. Guessing low to ease cashflow can cost more than it saves.

What to do now

1. If the 7 August update applied to you and you missed it, get April onwards into MTD-compatible software and file the cumulative update by 7 November. That discharges the first quarter along with the second.
2. If you have never checked whether you are in scope, look at the qualifying income on your 2024-25 return, turnover rather than profit.
3. If you missed 31 July, pay it now to stop the interest, and do not assume a penalty is coming.
4. If you paid but it hurt, look at whether an SA303 makes sense before January, rather than after.

For the wider picture on setting money aside, allowable expenses and choosing accounting software, see our guide to managing your freelance finances and taxes. If you are still getting set up, the freelance startup checklist covers the paperwork side.

This is general information, not tax advice. Figures and deadlines are correct as at 17 August 2026. Check GOV.UK or speak to an accountant about your own position.

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