ACCA has warned that around 400,000 landlords and sole traders are on course to miss Friday’s first Making Tax Digital for Income Tax filing deadline, with the accountancy body arguing that HMRC’s awareness push has left too many taxpayers unprepared.
The warning comes less than 24 hours before the 7 August deadline for the first quarterly update under the new regime. ACCA said HMRC data showed only just over 400,000 of the roughly 850,000 mandated taxpayers had signed up, leaving more than half still outside the system ahead of the first reporting cut-off.
For landlords, the immediate issue is not just the deadline itself but the risk of assuming HMRC’s 12-month soft-landing period means there is nothing to worry about. ACCA said penalties can still apply in some cases, particularly around digital record-keeping and deliberate non-compliance.
ACCA says soft landing is not a free pass
Yogesh Dhanak, Senior Technical Advisory Manager at ACCA, said taxpayers should not assume the first year of the regime is penalty-free.
He said: “While HMRC has confirmed a 12-month soft-landing period where late filing points won’t be issued for these initial quarterly updates, taxpayers must not treat this as a free pass.”
Dhanak added that HMRC can still penalise businesses for failing to keep digital records or for deliberately withholding information, and said placeholder nil submissions filed with the intention of correcting them later are “completely unacceptable”.
That warning lands against a deadline Landlord Knowledge highlighted last month in its report on HMRC’s 7 August filing cut-off for the first landlord MTD updates. The latest ACCA intervention suggests the compliance problem may now be less about awareness of the rule change and more about whether affected taxpayers have actually completed the sign-up and software steps in time.
Why landlords could still face trouble after Friday
ACCA said rising costs are also stopping some landlords and sole traders from getting ready in time, arguing that many will need paid accountancy support and software that is fully capable of handling quarterly submissions. It also warned that some cheaper tools may not yet be fully functional for the new reporting cycle.
The body said HMRC needs to give clearer guidance on what counts as acceptable compliance during the first year. That matters because the soft-landing period does not remove the need to keep proper digital records or to submit accurate updates through compatible software.
This follows Landlord Knowledge’s recent report on HMRC’s draft correction rules, which showed how the tax authority is already tightening the wider compliance framework around landlord reporting. Taken together, the latest deadline pressure and the draft penalty changes point to a tax system that is becoming less forgiving for landlords who leave admin until the last minute.
HMRC onboarding test now matters beyond this week
ACCA said the current shortfall also raises bigger questions about the next stage of Making Tax Digital, when lower-earning sole traders are due to be drawn in from 2027/28. If HMRC is struggling to get higher earners over the line now, the practical challenge could grow sharply when the scope widens.
For landlords already inside the regime, the practical lesson is simple: confirm sign-up status, check software works properly, and make sure digital records match the figures being sent. The deadline may be close, but the wider compliance burden does not end once this first update is filed.
What this means for landlords
- If you’re over the MTD threshold: check immediately that you are signed up and using software that can file a proper quarterly update rather than a placeholder return.
- Watch for: further HMRC clarification on digital record-keeping expectations during the soft-landing year.
- Bottom line: the first MTD deadline is not just a formality – landlords who are not properly set up could still face compliance problems even if late filing points are paused.
Editor’s view
HMRC’s soft landing was meant to reduce panic, but it may also have encouraged some landlords to think this first deadline can be ignored. ACCA’s warning suggests the bigger risk is not mass late points on day one, but a large group of taxpayers discovering too late that sign-up, software and record-keeping still need to be right.
Author: Editorial Team – UK landlord & buy-to-let news, policy, and finance
Published: 6 August 2026
Sources: ACCA, HMRC Making Tax Digital for Income Tax guidance
Related reading: HMRC sets 7 August deadline for first landlord MTD updates
