MTD Soft Landing 2026/27: What HMRC’s First Year Easement Actually Covers

If you missed the first MTD quarterly update deadline on 7 August, you have probably heard that it does not matter this year. That is partly true, and the part that is not true is the part that costs money.

HMRC has confirmed a soft landing for the 2026/27 tax year. It is real, and it is more generous than many people expected. But it is narrower than it sounds, and it has been widely described in a way that leaves people exposed.

This article sets out exactly what the soft landing covers, what it does not cover, and what to do if you are behind with the next deadline approaching.

The short answer

For the 2026/27 tax year, HMRC will not issue penalty points for late quarterly updates. The soft landing covers late quarterly updates only. It does not cover your Final Declaration, it does not cover late payment of tax, and it does not cover failures to keep digital records.

So a missed quarterly update will not cost you a penalty point this year. Everything else carries its normal consequences.

What the soft landing covers

One thing, and it is worth being precise about it.

During the 2026/27 tax year, if you file a quarterly update late, HMRC will not give you a penalty point for it. That applies whether you are late with one update, two, or all four.

This was confirmed at Budget 2025 and applies to the first group brought into MTD for Income Tax, those with qualifying income above £50,000 from 6 April 2026.

There is one further point that often gets missed, and it is genuinely reassuring. Quarterly updates do not carry inaccuracy penalties. HMRC treats them as a running summary of your income and expenses, not as a tax return. If a figure needs correcting later, you correct it. Getting something slightly wrong in a quarterly update is not the same as getting your tax return wrong.

What the soft landing does not cover

This is the part to read properly. There are four things, and each one still carries full consequences.

Your Final Declaration is not covered

Your 2026/27 Final Declaration is due by 31 January 2028. File it late and you pick up a penalty point under the normal rules.

The soft landing stops at the quarterly updates. The year end return has never been included.

Late payment of tax is not covered

Submitting late and paying late are two separate things with two separate penalty regimes. The soft landing deals only with submitting.

Your 2026/27 tax is still due by 31 January 2028, along with any payments on account. Pay late and you face late payment penalties and interest in full.

There is one small easement in the first year. Instead of the usual 15 days before a late payment penalty applies, you get 30 days. It is available once, and you can also agree a Time to Pay arrangement with HMRC within that window. Use it carefully, because it will not be there a second time.

Digital record keeping is not covered

MTD requires you to keep your records digitally, with unbroken digital links from your records through to your submission.

Failing to do that can attract penalties of up to £3,000. The soft landing does nothing about this. You can file every quarterly update on time and still be exposed here if your records are kept the old way, or if figures are being copied and pasted between spreadsheets.

It is this year only

The soft landing covers 2026/27 and nothing beyond it.

If you are joining in April 2027, when the threshold drops to £30,000, you do not currently get the same concession. As things stand, the points system applies to you from the start.

The thing people are getting wrong

Here is what the headline “no penalties in year one” hides.

The soft landing removes the penalty, not the obligation.

You still have to file every quarterly update. And you cannot complete your Final Declaration until all four are in. So a skipped update does not disappear. It sits there and blocks your year end return, and you will have to go back and file it anyway, probably in January 2028 when you are least able to deal with it.

There is a second cost that is easier to miss. Quarterly updates are what drive HMRC’s running estimate of your tax bill. Skip them, and you get no visibility of your position all year. Your first real sight of what you owe for 2026/27 would be at the Final Declaration in January 2028.

That is exactly the situation MTD was supposed to end. The soft landing was meant to give you a year to learn the rhythm without being punished for stumbling. Used as a reason to do nothing, it hands you back the old problem with less time to fix it.

If you are behind, here is the catch up

The good news first. Quarterly updates are cumulative. Each one reports the year to date rather than just that quarter in isolation. So catching up is far less painful than filing four separate sets of figures.

The deadlines for 2026/27 are 7 August, 7 November, 7 February and 7 May. This is what to do.

1. Confirm MTD actually applies to you. It is based on your qualifying income for 2024/25, which is gross income before expenses, from self employment and property combined. Plenty of people assume they are in when they are not, and the other way round. Our guide to MTD qualifying income explains how it is calculated.
2. Check whether you are actually signed up. Since September 2026 HMRC has been automatically enrolling people who should be in MTD and have not registered. If you have had a letter, you are in. If you have not registered and have not heard anything, read our guide on how to register for MTD.
3. Get your software sorted. You cannot file without HMRC recognised software. If you have not chosen one, this is the step that takes longest, so start here. Our comparison of the best MTD software in the UK covers the main options, and there are free HMRC accounting software choices that meet the rules in full.
4. Get your records from 6 April 2026 into it. This is usually the real work. Bank transactions, invoices, receipts and expenses from the start of the tax year.
5. File any quarterly update you have missed. No penalty point applies this year.
6. File the next one on time. Check which period it covers before you start.
7. Check your digital links. Make sure nothing is being copied and pasted between spreadsheets. This is the exposure the soft landing does not protect you from.

If you cannot get this done on your own in the time available, that is a reasonable conclusion rather than a failure. It is a normal starting point for us.

What to actually do with this year

Treat the soft landing as what it was designed to be. A year to build the habit without being punished for getting it wrong.

That means filing each update roughly on time even though nothing happens if you do not. It means getting your record keeping genuinely digital now, while there is no points pressure, rather than in a year when there is. And it means using the quarterly estimates to see your tax position as the year goes, instead of waiting for January 2028.

If you are in the April 2027 group at the £30,000 threshold, there is an extra reason to pay attention. You do not get a soft landing. Watching how this year goes for the people above you is free information.

Frequently asked questions

Will I be fined if I miss a quarterly update in 2026/27?

No. HMRC has confirmed that no penalty points will be issued for late quarterly updates during the 2026/27 tax year. You still have to file the update, because your Final Declaration cannot be completed without it.

Does the soft landing cover my tax return?

No. It covers quarterly updates only. Your 2026/27 Final Declaration is due by 31 January 2028 and will attract a penalty point if it is late.

Does the soft landing mean I can pay my tax late?

No. Late payment is a separate regime and is not covered. There is a first year easement giving you 30 days instead of 15 before a late payment penalty applies, available once only.

How many points before I actually get a fine?

For quarterly obligations the threshold is four points, at which stage a £200 penalty applies. Because no points are being issued for late quarterly updates this year, you cannot reach that threshold through late quarterly updates in 2026/27.

Will there be a soft landing in 2027/28?

Not as things stand. The concession covers 2026/27 only. Those joining in April 2027 at the £30,000 threshold are not currently covered.

I have not filed anything yet. How much trouble am I in?

Less than you think, financially, this year. Quarterly updates are cumulative, so catching up means bringing your records up to date rather than filing four separate returns. You should still act now rather than leaving it.

Can I still be penalised even if I file everything on time?

Yes, if your records are not genuinely digital. Record keeping failures can attract penalties of up to £3,000 and are not covered by the soft landing. Our guide to MTD digital links explains what counts and what does not.

Not sure where you stand?

The soft landing gives you a year without penalty points for late quarterly updates. It does not give you a year off.

If you are behind, or if you are filing on time but unsure whether your record keeping would survive scrutiny, we will tell you honestly where you stand. The call is free and takes about 15 minutes.

Talk to an ICAEW chartered accountant

If HMRC has already contacted you about your MTD obligations, start here instead.

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