Misconceptions about keeping digital tax records are widespread – with the first deadline fast approaching, according to accountants.

The warning comes ahead of the first Making Tax Digital for Income Tax quarterly submission deadline next month – on 7th August.

Accountants claim that many taxpayers still do not understand what is required under the new scheme.

Eriona Bajrakurtaj, Chief Executive of of Major’s Accounts & Co, (pictured) says: “The biggest problems we’re seeing come from misconceptions about what’s required.

Making Tax Digital

“Some people think it doesn’t apply to them, while others believe they’ll have to pay tax every quarter or can simply submit placeholder updates to HMRC and sort everything out at year-end leaving it until the last minute.

“My advice is to start at the beginning of each quarter filing, choose HMRC-compatible software and build simple habits that make record-keeping part of your routine rather than something you only think about when a deadline is approaching.”

“With wider changes affecting landlords in particular, such as the Renters’ Rights Bill, having a real-time view of income, expenses and cash flow can help filers stay organised, plan ahead and manage their properties more effectively.

The biggest problems we’re seeing come from misconceptions about what’s required.”

Making Tax Digital became mandatory from 6th April this year for landlords and sole traders with qualifying income above £50,000.

The threshold will fall to £30,000 from April 2027 before reducing again to £20,000 from April 2028, bringing almost all landlords within its scope.

The first Making Tax Digital for Income Tax quarterly submission deadline next month covers the first three-month quarter of the 2026/27 tax year – 6th April, 2026, to 5th July, 2026, or 1st April to 30th June for those who elected calendar quarters.

Digital records

Affected taxpayers must keep digital records and submit quarterly updates to HMRC, using compatible software rather than relying on traditional annual self-assessment reporting.

HMRC is not issuing late-submission penalties for missed quarterly updates during the first year of Making Tax Digital.

However, taxpayers who repeatedly miss deadlines from 2027/28 could face £200 penalties under a new points-based regime.