Making Tax Digital for Builders: What Happens If You Miss a Quarterly Deadline?

If you’re a self-employed builder, carpenter, electrician, plumber or CIS subcontractor, you may be worried about what happens if you miss a Making Tax Digital (MTD) quarterly deadline.

Perhaps you’ve been busy working on site, haven’t kept your bookkeeping up to date, or simply didn’t realise you needed to send an update to HMRC.

The good news is that missing an MTD quarterly deadline doesn’t automatically mean you’ll receive a fine.

In fact, HMRC has introduced special rules for the 2026/27 tax year, giving those who joined Making Tax Digital in April 2026 more time to adjust to the new system without quarterly late-submission penalties.

However, you still need to keep digital records, submit your outstanding updates and meet your annual tax obligations.

At MTD Trade Books, we help self-employed builders and tradespeople organise their bookkeeping, with introductory ongoing bookkeeping from £20 per month and eligible catch-up bookkeeping from £99.

Here’s what you need to know if you’ve missed an MTD quarterly deadline.

What Are the Making Tax Digital Quarterly Deadlines for Builders?

Making Tax Digital for Income Tax requires eligible self-employed people to keep digital records of their business income and expenses and submit regular quarterly updates using compatible software.

For those using standard tax-year reporting periods, the deadlines are:

• 7 August — first quarterly update.
• 7 November — second quarterly update.
• 7 February — third quarterly update.
• 7 May — fourth quarterly update.

These dates apply to the relevant tax year, with the February and May deadlines falling in the following calendar year.

Quarterly updates summarise your recorded income and expenses. They are not separate tax returns, and you don’t normally pay income tax simply because a quarterly update is due.

For a detailed explanation, read our guide:

MTD Quarterly Updates for Builders: What Do You Need to Submit?

What Happens If You Miss an MTD Quarterly Deadline in 2026?

This is particularly important for builders who joined Making Tax Digital on 6 April 2026.

HMRC will not issue late-submission penalty points for quarterly updates relating to the 2026/27 tax year.

That means if you missed the first deadline on 7 August 2026, or miss another quarterly deadline for that tax year, you won’t receive a quarterly late-submission penalty point.

But this doesn’t mean you can ignore your bookkeeping.

You must still:

• Keep the required digital records.
• Complete any outstanding quarterly updates.
• Use compatible software to submit the information.
• Complete your annual tax return by the relevant deadline.
• Pay any tax due on time.

For example, if you’re a builder who should have submitted your first quarterly update by 7 August 2026 but haven’t done so, you should still get your records organised and submit the outstanding update.

The temporary penalty easement is intended to help people adjust to Making Tax Digital, not remove the reporting requirements.

Important: The 2026/27 easement applies to late quarterly updates. Penalties can still apply to late annual tax returns and late tax payments.

You can read the full rules in HMRC’s official Making Tax Digital penalties guidance.

Will Builders Get Fined for Missing MTD Deadlines in 2027?

From the 2027/28 tax year, the normal points-based late-submission system applies to quarterly updates, under the rules currently announced.

This is particularly relevant to builders and tradespeople who are already within Making Tax Digital.

HMRC’s system works differently from the old approach of immediately issuing a fixed penalty for every missed deadline.

Instead, you normally receive a penalty point when you miss a relevant submission deadline.

Once you reach the penalty threshold, a financial penalty becomes payable.

How the MTD Penalty Points System Works

For taxpayers required to use Making Tax Digital for Income Tax, the normal late-submission threshold is four points.

For example:

• First missed deadline: One penalty point.
• Second missed deadline: Two points in total.
• Third missed deadline: Three points in total.
• Fourth missed deadline: Four points, triggering a £200 penalty.
• Further missed deadlines while at the threshold: Normally another £200 penalty for each missed submission deadline.

The points system also covers relevant late annual tax returns.

Points can expire or be removed after the required period of compliance, subject to HMRC’s rules.

This means an occasional mistake doesn’t necessarily lead to an immediate financial penalty, but repeatedly missing deadlines can become expensive.

The special no-penalty-points arrangement is confirmed for quarterly updates in 2026/27. It should not be assumed that everyone joining MTD in later years automatically receives the same concession.

Can You Submit an MTD Quarterly Update After the Deadline?

Yes. If you’ve missed a deadline, you should submit the outstanding update as soon as reasonably possible.

The first step is to make sure your digital bookkeeping records are complete and accurate.

For example, if you’re a self-employed carpenter who missed the August deadline, you may need to organise:

• Payments received from contractors.
• Payments from private customers.
• Business expenses.
• Materials purchased for jobs.
• Tools and equipment.
• Fuel and allowable travel expenses.
• CIS deductions and payment statements.

Once the records are organised, you can use compatible software to prepare and submit the outstanding update.

Don’t simply guess the figures to get something submitted quickly.

Accurate records are important for your annual tax position and for avoiding further problems later.

What If You’ve Missed Two MTD Quarterly Updates?

If you’ve missed more than one quarterly update, the important thing is to get your bookkeeping back under control.

Imagine you’re a self-employed builder who hasn’t properly organised your accounts since April.

You’ve received money from several contractors, bought materials and tools, paid for fuel and collected CIS payment statements.

You may now have several months of transactions that need checking.

A practical approach is to:

• Gather the relevant business bank transactions.
• Identify payments received from customers and contractors.
• Record business expenses correctly.
• Check any CIS deductions against contractor statements.
• Reconcile your bookkeeping records.
• Submit the outstanding quarterly updates using compatible software.

You don’t necessarily need to start your bookkeeping again from scratch.

If your records are reasonably straightforward, it may be possible to organise everything efficiently.

This is exactly the sort of situation where catch-up bookkeeping support can be useful.

How Much Does Catch-Up Bookkeeping Cost for Builders?

At MTD Trade Books, we offer introductory catch-up bookkeeping from £99 for eligible straightforward self-employed businesses.

Our £99 service is intended for relatively simple cases, typically involving one or two missed quarterly periods, depending on the volume and complexity of the transactions.

For example, you might be a CIS subcontractor who:

• Has a straightforward business bank account.
• Receives payments from a small number of contractors.
• Has ordinary building-trade expenses.
• Needs help organising missing bookkeeping records.
• Wants to get back on track with Making Tax Digital.

The exact work required will depend on your circumstances.

More complicated records, additional periods, VAT, or services outside the agreed scope may require a separate quotation.

Our ongoing bookkeeping service also starts at £20 per month for eligible straightforward sole traders using FreeAgent.

For more details, read:

MTD Bookkeeping for Builders: Affordable Making Tax Digital Help from £20 a Month

What Happens If You’re a CIS Subcontractor and Miss an MTD Deadline?

CIS subcontractors have the same general Making Tax Digital quarterly reporting obligations as other eligible self-employed people.

However, their bookkeeping can be more complicated because contractors often deduct CIS tax before making payment.

For example, suppose your contractor pays you:

• Gross labour earnings: £2,000
• CIS tax deducted: £400
• Net payment into your bank: £1,600

Your bookkeeping needs to reflect the gross earnings and CIS deduction correctly.

Simply recording the £1,600 bank receipt as your total gross earnings could understate your income.

If you’ve missed an MTD deadline, it’s important to organise both your business transactions and CIS deduction records before completing your outstanding updates.

For more practical information, read:

Making Tax Digital for CIS Subcontractors: How to Record Income, Expenses and CIS Deductions

You can also read our earlier guide:

Do CIS Subcontractors Have to Use Making Tax Digital?

Can FreeAgent Help You Catch Up with MTD Bookkeeping?

FreeAgent is cloud-based accounting software that can help self-employed builders and tradespeople keep their financial records organised.

Depending on your setup, it can help you:

• Import transactions from a connected business bank account.
• Record income and expenses.
• Organise invoices.
• Record CIS deductions.
• Maintain digital bookkeeping records.
• Use supported Making Tax Digital reporting features.

For example, if your business bank account is connected to FreeAgent, many transactions may already be available for checking and categorising.

This can save time compared with manually entering every transaction.

However, the transactions still need to be reviewed and recorded correctly.

FreeAgent may also be available without a separate software subscription through certain qualifying business bank accounts, subject to eligibility conditions.

Find out more in our guide:

FreeAgent for Builders and Tradespeople: How to Get MTD Bookkeeping Software for Free

Do You Still Need to Complete Your Annual Tax Return If You’ve Missed Quarterly Updates?

Yes. Missing quarterly updates doesn’t remove your obligation to complete your annual tax return.

Under Making Tax Digital for Income Tax, eligible taxpayers must keep digital records, send the required quarterly updates and complete the annual tax return process using compatible software.

The usual annual tax return deadline remains 31 January following the end of the tax year.

For example, the tax return for 2026/27 is due by 31 January 2028.

You will need to complete your outstanding quarterly updates before submitting your annual tax return through the MTD process.

Late annual tax returns can result in penalty points and financial penalties, even where the special 2026/27 quarterly-update easement applies.

Late tax payments are subject to separate rules, including interest and potential penalties.

This is why it’s sensible to deal with missed quarterly updates well before the annual tax return deadline.

Who Needs to Use Making Tax Digital for Income Tax?

Making Tax Digital for Income Tax is being introduced gradually according to qualifying income.

The main thresholds are:

• 6 April 2026: Qualifying income over £50,000.
• 6 April 2027: Qualifying income over £30,000.
• 6 April 2028: Qualifying income over £20,000.

Qualifying income generally means your combined gross income from self-employment and property, before deducting business expenses.

It is not the same as taxable profit.

The relevant earlier tax year’s income is used to determine when you must join, and exemptions or other exceptions may apply.

For a straightforward explanation of the rules, read:

Making Tax Digital for Builders and Tradespeople: A Simple Guide

How Can Builders Avoid Missing Future MTD Deadlines?

The easiest way to avoid falling behind is to keep your bookkeeping organised throughout the year.

Here are six practical suggestions.

• Use a dedicated business bank account. Keeping business transactions separate from personal spending makes bookkeeping easier.
• Choose compatible software. FreeAgent is one option for suitable self-employed businesses.
• Keep your receipts and CIS statements. Don’t wait until the end of the year to gather everything.
• Check your bookkeeping regularly. Reviewing transactions each month can prevent a large backlog.
• Keep track of quarterly deadlines. Put the dates in your calendar and allow time to check your figures.
• Get bookkeeping support if needed. Having somebody help maintain your records can reduce the risk of falling behind.

If you’re expecting to join Making Tax Digital in April 2027, preparing early can make the transition easier.

We’ve written a separate guide explaining how to get ready:

How to Get Ready for Making Tax Digital for Income Tax if You’re Self-Employed

Why Choose MTD Trade Books?

MTD Trade Books was created to provide straightforward, affordable bookkeeping support for self-employed builders, tradespeople and CIS subcontractors.

With over 30 years of experience in the building trade, we understand how construction businesses operate.

We know about contractor payments, CIS deductions, tools, materials, fuel and the everyday expenses involved in working on building sites.

Our aim is to help straightforward sole traders keep their bookkeeping organised without unnecessary complications.

We focus on:

• Affordable ongoing bookkeeping.
• Catch-up bookkeeping for eligible cases.
• CIS subcontractor records.
• FreeAgent bookkeeping.
• Practical support for self-employed tradespeople.
• Helping clients stay organised for Making Tax Digital.

We’re based in Uxbridge and can help suitable clients remotely.

Missed an MTD Quarterly Deadline? Get Help from £99

If you’ve missed a Making Tax Digital quarterly deadline, don’t ignore it.

Even where HMRC isn’t issuing late-submission penalty points for quarterly updates in 2026/27, you still need to organise your digital records and complete the required submissions.

Getting your bookkeeping back on track now can make future quarterly updates and your annual tax return easier to manage.

At MTD Trade Books, we offer:

• £99 catch-up bookkeeping for eligible straightforward cases.
• £20 per month ongoing bookkeeping for eligible sole traders using FreeAgent.

Whether you’re a self-employed builder, plumber, electrician, carpenter or CIS subcontractor, we can discuss whether our straightforward bookkeeping service is suitable for you.

Visit MTD Trade Books to get in touch and find out more.

MTD Trade Books — affordable bookkeeping support for builders and tradespeople.