HMRC has published Edition 3 of its Ready, Steady, File newsletter for the Making Tax Digital for Income Tax beta, dated 6 January 2026. The update is aimed at testers and their agents ahead of the April 2026 start for the first group required to use MTD for Income Tax.

Participation remains steady. HMRC reports around 5,000 taxpayers enrolled, about 3,000 actively submitting quarterly updates, and more than 3,000 second‑quarter submissions delivered. Roughly 60% are represented by agents, spanning self‑employment and property income cases in the test cohort.

On readiness, HMRC says it has completed stress testing, resolved common agent account issues with fresh guidance, confirmed multiple‑agent functionality, and migrated to the Enterprise Tax Management Platform to enable better pre‑population and near real‑time tax visibility. Third‑party software has been submitting quarterly updates successfully, including estimated tax calculations. End‑of‑year return testing for 2024 to 2025 and 2025 to 2026 continues.

The most frequent cause of failed submissions is confusion around calendar quarter elections. By default, quarterly updates follow tax‑year quarters, so Quarter 3 is due by 5 February 2026. If you elect calendar quarters, Quarter 3 ends on 31 December and is due by 7 February. Elections must be made before the first update and then apply for the whole year. In 2026 to 2027, the five‑day gap from 1 to 5 April must be reported via a Business Source Adjustable Summary.

HMRC urges agents to sign up clients well before March. Clients with qualifying income above £50,000 in 2024 to 2025 must use MTD for Income Tax from 6 April 2026, and each client needs an individual sign‑up. Once enrolled, digital record‑keeping starts from April 2026.

Policy signals from Autumn Budget 2025 point to a gentler first year. New joiners in April 2026 will not accrue penalty points for the first four quarterly updates, though those updates still need filing before the end‑of‑year return. The easement does not cover the 2026 to 2027 end‑of‑year return, due 31 January 2028. The first year of the late‑payment regime gives 30 days before a penalty. A one‑year deferral applies for specific groups, while customers under deputyship are permanently exempt, with details to be legislated in the Finance Bill 2025 to 2026.

For testers working to live dates, HMRC flags the third quarterly update deadline as 5 February 2026 for the standard tax‑year quarter, or 7 February if you elected calendar quarters. There are no penalties during testing, but timely submissions help HMRC validate capacity and guidance. After each update, a year‑to‑date estimated tax figure is provided for budgeting only, and HMRC is seeking feedback on its usefulness.

Market Pulse UK view: with April approaching, SMEs and sole traders should confirm their accounting period, decide early whether a calendar quarter election genuinely simplifies bookkeeping, and check with software providers that MTD ITSA features such as multiple‑agent access and pre‑populated data are supported. Agents should refresh service accounts, secure client authorisations, and plan who will handle the five‑day April gap and the Business Source Adjustable Summary, while treating HMRC’s year‑to‑date estimate as a planning aid rather than a final bill.