Making Tax Digital lands on 7 August, and the 31 July payment on account is due today

Published 24 July 2026. Updated 31 July 2026.

Two HMRC deadlines fall within a fortnight of each other this summer. The second payment on account was due today, 31 July. The one still ahead of you is brand new, and it is the one catching people out.

7 August 2026: your first Making Tax Digital update

This has never happened before, which is precisely why it is being missed.

Making Tax Digital for Income Tax went live on 6 April 2026 for sole traders and landlords with gross 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 covers 6 April to 5 July 2026 and is due by 7 August 2026. If you use calendar quarters instead, yours covers 1 April to 30 June and is due on the same date. HMRC has written 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 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.

Two things worth knowing

There is a soft landing. HMRC will not apply late submission penalty points for quarterly updates during the 2026-27 tax year. 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 a final declaration replaces the return from the following year.

It widens from here

The threshold drops to £30,000 in April 2027 and £20,000 in April 2028. If you are 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 applies to you, check your 2025/26 gross income crossed £50,000 — turnover, not profit — then confirm your software is MTD-compatible and that April to July is actually in it.
2. If you missed 31 July, pay it now to stop the interest, and do not assume a penalty is coming.
3. 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 31 July 2026. Check GOV.UK or speak to an accountant about your own position.

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