3 UK Tax Updates Every Accounting Practice Should Plan For (October 2026)

Making Tax Digital for Income Tax (MTD for IT) is now in its first live tax year, and HMRC is already planning the next digital change for VAT. Three updates matter most for UK accounting practices right now: the next quarterly deadline, the penalty rules that begin next year, and a planned pre-filing check for VAT returns.

Update 1: 7 November 2026, MTD for Income Tax Q2 update due

MTD for Income Tax became mandatory from 6 April 2026 for sole traders and landlords with qualifying income above £50,000. Instead of one annual Self Assessment return, affected clients now keep digital records in compatible software, send four quarterly updates, and submit a Final Declaration after the tax year ends. HMRC expected around 780,000 taxpayers to sign up from April 2026.

The Q2 update covers 6 July to 5 October 2026 and is due on 7 November 2026.

Update	Period covered	Deadline
Q1	6 April to 5 July 2026	7 August 2026
Q2	6 July to 5 October 2026	7 November 2026
Q3	6 October 2026 to 5 January 2027	7 February 2027
Q4	6 January to 5 April 2027	7 May 2027
Final Declaration	Whole 2026/27 tax year	31 January 2028

Points to remember:

Updates are cumulative. Each one covers the tax year to date. If Q1 had an error, the corrected figures go into Q2 rather than a resubmission.
Calendar quarters are an option. Some clients can elect calendar periods (for example, Q2 covering 1 July to 30 September). The submission deadlines stay the same.
Sequence matters. All quarterly updates must be sent before the Final Declaration can be submitted.

Update 2: From 2027/28, penalty points start

HMRC has confirmed a soft landing for 2026/27. No penalty points apply for late quarterly updates in this first year. This does not cover late Final Declarations or late tax payments, which can be penalised from the start.

From 2027/28, the points-based system applies in full:

Each missed quarterly update or Final Declaration deadline earns one penalty point.
At four points, a £200 penalty applies, with a further £200 for each later missed deadline while the client stays at the threshold.
Reasonable excuse provisions still apply.

The soft landing is not a reason to relax. Missed updates still have to be caught up, and the outstanding updates must be filed before the 2026/27 return can be submitted.

The threshold is also falling

Qualifying income is measured on gross income (turnover, not profit) from self-employment and property combined:

From April 2026: above £50,000
From April 2027: above £30,000
From April 2028: above £20,000

Your £30,000 to £50,000 clients come into scope in April 2027. That gives you about six months to move them onto compatible software and clean up their records.

Update 3: April 2027 (planned), HMRC VAT Assist

HMRC has published a transparency record for VAT Assist, a pre-filing check for UK VAT returns. It is classed as pre-deployment. Based on the published details:

MTD software sends draft VAT return figures to HMRC before submission.
HMRC compares them with information it already holds and returns a “digital nudge” if a rule identifies a possible error.
It is voluntary and will not block filing. Taxpayers can ignore a warning if they believe the return is correct.
HMRC describes it as rule-based, not AI. It will not receive underlying invoices or transaction-level detail.
The planned launch is around April 2027, with an industry consultation planned for early October 2026.

Timing and rules may change after consultation, so treat April 2027 as a plan, not a fixed date.

Practical checklist for your practice

Diarise 7 November, 7 February and 7 May for every affected client.
Reconcile monthly, not quarterly. Waiting for the deadline month is where most errors happen.
Confirm software for every in-scope client, including landlords with mixed property and trading income.
List your £30,000 to £50,000 clients and plan their onboarding for April 2027.
Review engagement letters and pricing, since quarterly work changes scope and workload.
Tighten VAT return reviews before VAT Assist arrives, so a nudge becomes a final check rather than a first warning.

How outsourcing can help

Quarterly reporting turns a once-a-year task into a repeating cycle, and the pressure usually lands on bookkeeping and reconciliation. At LekhaWekha (AskUs Consultants LLP), we support accounting practices in the UK, Ireland and the USA with outsourced bookkeeping, VAT return preparation and compliance support, so your team can focus on advisory work and client relationships.

Visit lekhawekha.com to discuss capacity for the next quarter.