Truro firm warns as 428,000 miss tax deadline

If you are self-employed, run a small business or let out a property in Cornwall, there is a good chance you were supposed to file something with HMRC by 7 August. And there is an even better chance you did not.

What just happened

Making Tax Digital (MTD) for Income Tax went live in April 2026, the biggest shake-up to personal tax in more than 30 years. It moves hundreds of thousands of sole traders, landlords and self-employed workers away from a single annual tax return and into quarterly digital record keeping instead.

The first of those quarterly updates fell due on 7 August. According to HMRC’s own figures, analysed by accountancy and business advisory group Azets, only 436,000 of the more than 864,000 people in scope filed on time. That is just 50.5%, meaning an estimated 428,000 self-employed workers, sole traders and landlords missed the very first deadline.

Why so many missed it

Fraser Campbell, UK head of accountancy and business advisory services at Azets, which has an office at Woodlands Court on Truro Business Park, said the number who missed the deadline is greater than the combined populations of Westminster and York.

“This is partly due to the fact that learning curve for taxpayers and their accountants has been very steep in the lead up to the first quarter submission, with HMRC system downtime, registration glitches, managing exemptions and deferrals, and coming to terms with limitations and requirements of the digital submission process for taxpayers with more complex affairs contributing to a number of late submissions across the UK,” Fraser said.

What happens if you have already missed it

HMRC has waived fines for the first year of MTD, so a missed August deadline will not trigger a penalty on its own. But Fraser warned against treating that as a reason to leave things be.

“HMRC have waived fines for the first year of this initiative and that is definitely needed given this learning curve, and the process will get smoother for those now in the system next time around,” he said. “However, those that have left it late to engage in the requirements are setting themselves up for pain in the future, so it’s worth getting the next quarter’s submission in as quickly as possible and starting to prepare for the November filing deadline as quickly as possible.”

Leave it too long and the backlog stacks up fast. “While HMRC have said they won’t fine those who file their submissions late, anyone who leaves their first filing until the 2027 deadline will need to catch up with four filings from this year at the same time as next year’s quarterly filings become due, as well as their annual declaration, so they’ll have to potentially file nine returns over the same 12 month period,” Fraser said.

What to do now

MTD for Income Tax is expected to affect 2.9 million people by 2028, and it is already reshaping how some of the smallest businesses in Cornwall handle their books. “They’ve had to familiarise themselves and work with new processes and MTD compliant software at a time when many are struggling through difficult economic headwinds,” Fraser said.

He was careful not to suggest downloading free software is the whole answer. “A lot has been said about the free software on the market and while there are some good free options available, having the software alone won’t help people comply with the requirements of MTD. Becoming compliant isn’t a simple process as getting the filings ready for submission requires accounting knowledge and a lot of diligence, so I’d encourage anyone who is in scope, either now or in the future, to speak to an accountant for advice and support.”

Getting the quarterly figures right matters beyond the four deadlines themselves. “The quarterly submissions form the basis of the end of year tax calculation. It is crucial that these are done accurately to make sure the right amount of tax is paid at the end of the tax year and that the person involved has as accurate an idea as possible of how much money they need to hold back to make this payment,” Fraser said.

The upside, once it beds in

Fraser was clear the change is not all downside. “The introduction of MTD should also make forward tax planning and forecasting and the year-end process a lot smoother,” he said. “It will give people real-time digital information about their business performance and projected tax bills, which will be hugely helpful for any discussions they have with their tax adviser, and give them the information they need to better manage their savings and tax payments.”

His advice for anyone unsure where they stand: “Check whether they fall in line with the new reporting obligations, ensure the software you or your accountant is using is HMRC compliant and start using HMRC compliant software now if it isn’t, and check whether you’re exempt from the new regime, you might be, so it’s worth looking at HMRC’s website or speaking to an accountant.”

The figures released so far cover the whole of the UK, with no regional breakdown yet available for Cornwall and the Isles of Scilly.