- Who Needs to Submit, and From When
- The Full 2026/27 Reporting Calendar
- What a Quarterly Update Actually Involves
- If You Have More Than One Income Source
- Digital Records and Software
- Joining Partway Through the Year
- Exemptions from MTD for Income Tax
- How Cox Hinkins Can Help
- FAQs: Frequently Asked Questions
- Conclusion
If you are self-employed or a landlord earning over £50,000 a year, your first Making Tax Digital quarterly update is due by 7 August 2026. A quarterly update is a digital submission to HMRC summarising your income and expenses for a three-month period, sent through MTD-compatible software. It is not a tax return and it does not calculate or collect any tax.
MTD Quarterly updates are just a technique to disclose your company’s income and expenses throughout the year rather than waiting until the annual tax return, even if they may sound complicated. You can maintain compliance, prevent needless penalties, and maintain a better understanding of your tax situation by timely filing them.
In this blog, we will outline who must submit an MTD quarterly update, what information is needed, and how to make the process easy and quick.
Who Needs to Submit, and From When
MTD for Income Tax will apply in phases:
- From 6 April 2026: Self-employed individuals and landlords with gross annual income above £50,000 from self-employment and property must follow MTD rules.
- From 6 April 2027: The requirement will extend to those with gross annual income above £30,000.
- From 6 April 2028: The requirement will extend to those with gross annual income above £20,000.
Individuals covered under the given category are required to maintain digital records and use compatible software to submit quarterly updates to HMRC. The total gross income from property and self-employment is the basis for the income threshold.
If you are not sure whether you fall into scope, HMRC bases eligibility on your gross income from the tax year before the phase starts, not your current year income. You do not choose to join early or late once you are over the threshold for your phase.
The Full 2026/27 Reporting Calendar
Quarterly updates must be sent to HMRC by the following dates for taxpayers who must adhere to MTD for income tax starting on April 6, 2026:
| Reporting Period | Quarterly Update Deadline |
|---|---|
| 6 April 2026 to 5 July 2026 | 7 August 2026 |
| 6 July 2026 to 5 October 2026 | 7 November 2026 |
| 6 October 2026 to 5 January 2027 | 7 February 2027 |
| 6 January 2027 to 5 April 2027 | 7 May 2027 |
If you prefer to report in calendar months rather than the standard tax quarters shown above, you can elect to use calendar quarter periods instead, for example 1 April to 30 June rather than 6 April to 5 July. The submission deadline stays the same either way. This election needs to be set up with your software or agent before your first submission.
The quarterly updates, which include summaries of income and expenses, are submitted using HMRC-compatible software. The Self Assessment tax return, which must still be filed by the customary deadline of January 31 at the end of the tax year, is not replaced by them.
What a Quarterly Update Actually Involves
A three-month reporting period’s worth of business or property income and expenses are summarized in a quarterly update under Making Tax Digital (MTD) for Income Tax. It is not a complete tax return and does not necessitate sending HMRC comprehensive transaction-level data.
Each quarterly update typically includes:
- Total income received during the reporting period
- Total allowable expenses paid during the period
- Breakdown of income and expenses by category, where required
- Confirmation that the digital records are accurate and complete
Only the summary data are provided to HMRC via appropriate MTD software; businesses and landlords are required to maintain their underlying digital records, including specifics of individual transactions.
To certify their final taxable income and fulfill their self-assessment duties, taxpayers must still file an End of Period Statement (EOPS) and a Final Declaration at the end of the tax year.
If You Have More Than One Income Source
All eligible income is taken into account when deciding whether you are required to comply with MTD for income tax if you have several self-employment businesses, multiple UK property businesses, or both.
For quarterly reporting:
- Each self-employment business requires its own quarterly update.
- All UK property income is reported together in one quarterly update, even if you own multiple UK rental properties.
- Overseas property income is reported separately from UK property income.
For instance, if you lease residential property in the UK and manage two sole trading businesses, you need to submit:
- Two quarterly updates for your self-employment businesses.
- One quarterly update covering all your UK property income.
After the end of the tax year, each update must be filed using HMRC-compatible software, followed by a Final Declaration and, if necessary, an End of Period Statement (EOPS).
Digital Records and Software
Taxpayers covered by MTD for Income Tax are required to maintain digital records and use software compatible with HMRC to submit quarterly updates. The requirements cannot be met by manual spreadsheets or paper records alone unless they are connected to appropriate software.
Your digital records should include:
- The date of each transaction
- The amount of income or expense
- The category of income or expense
- A digital record of any adjustments made
Software that is compatible with HMRC can do calculations, keep digital records, link directly to HMRC, and electronically send quarterly updates. MTD for Income Tax is already supported by several well-known accounting systems, which facilitates compliance and reduces manual error rates.
A clearer picture of your company’s finances and timely correct quarterly submissions are two more benefits of using MTD-compatible software throughout the year.
Joining Partway Through the Year
If your income moves you into scope after the tax year has already started, for example a new self-employment business or a new rental property, you do not join MTD mid-year. Your position is assessed using your qualifying income from an earlier tax year, so you will normally know ahead of the tax year whether you need to be in the system from 6 April.
The Year One Grace Period, What It Actually Covers
HMRC will implement a soft landing for penalty points in the first year following a taxpayer’s adoption of Making Tax Digital (MTD) for Income Tax in order to give them time to get used to MTD.
During this grace period:
- No penalty points will be charged for late quarterly updates at any point during the 2026/27 tax year. There is no one-month cutoff on this concession; it applies to the whole tax year for anyone required to join MTD from 6 April 2026.
- This easement applies only to quarterly updates.
- It does not apply to the End of Period Statement (EOPS) (where required), the Final Declaration, or late payment of tax. Normal penalty and interest rules continue to apply for these obligations.
From the second year onward, a points based penalty applies. Each missed quarterly update or Final Declaration deadline adds one penalty point, and reaching four points triggers a £200 penalty, with a further £200 for each additional missed deadline after that. If you file more than one quarterly update late for the same deadline, for example one for your business and one for your property income, you only receive one penalty point for that deadline, not one per submission.
The grace period is designed to assist companies and landlords in learning about quarterly reporting and digital record keeping. To develop strong compliance habits from the start, taxpayers should still strive to file by the statutory deadlines.
Exemptions from MTD for Income Tax
A small number of taxpayers do not need to follow MTD for Income Tax even if their income is above the threshold. This mainly covers people HMRC considers digitally excluded, for example due to disability, age, remoteness of location, or religious grounds. If you think you may qualify, you need to apply to HMRC directly, it is not automatic.
How Cox Hinkins Can Help
Meeting quarterly filing deadlines is not the only part of preparing for Making Tax Digital (MTD) for Income Tax. Accurate digital record keeping, software compatible with HMRC, and a year-round reporting mechanism are all necessary. At Cox Hinkins, we make the move simple by assisting you in comprehending your MTD responsibilities and making sure you stay compliant right away.
Our skilled accountants can complete your End of Period Statement (EOPS) and Final Declaration, set up appropriate accounting software, keep your digital records, prepare and submit your quarterly updates, and advise whether MTD applies to you. We help you stay compliant, avoid needless penalties, and spend less time thinking about tax administration so you can concentrate on managing your business with proactive advice and continuous support.
Read more on our Self Assessment services and digital record-keeping support.
FAQs: Frequently Asked Questions
Do I pay tax when I submit a quarterly update?
No. A quarterly update is not a tax payment, but rather an information submission. It gives HMRC an overview of your property’s or business’s earnings and expenditures for the reporting period. When you provide a quarterly update, you do not have to pay income tax. After you file your Final Declaration at the end of the tax year, your income tax liability is determined. Any taxes owed must typically be paid by the regular Self Assessment date of January 31.
Is a quarterly update the same as a tax return?
No. An overview of your earnings and expenses for the reporting period is provided in a quarterly update. It does not calculate your taxes and is not a tax return. Even after the tax year is over, you still need to file a Final Declaration (and EOPS, if necessary).
What happens if I miss a quarterly deadline in 2026/27?
If you are in your first year of MTD for income tax, HMRC will not impose a penalty point for a late quarterly update at any point during the 2026/27 tax year. You still need to submit it as soon as possible, since all four quarterly updates must be filed before you can complete your Final Declaration. The standard late submission penalty guidelines will take effect following this grace period.
I’m both a sole trader and a landlord. Do I submit one update or several?
If you are both a landlord and a sole proprietor, you will typically file one quarterly report that includes all of your UK property revenue and separate quarterly reports for each self-employment business. If you own many sole proprietorships, each one needs its own update.
Can my accountant submit updates on my behalf?
Sure. If you designate a tax agent or accountant, they can maintain your digital records and use appropriate software to submit your Final Declaration, End of Period Statement (if applicable), and quarterly updates to HMRC on your behalf.
What if my turnover is under £85,000?
Turnover is not the basis for your MTD for income tax obligations. They are based on your eligible gross income from property and self-employment. Regardless of whether your turnover is less than £85,000, you must comply if your qualifying income satisfies the MTD criteria.
What if my income drops below £50,000 after I’ve started MTD?
If your qualifying income is less than £50,000, you do not immediately quit the MTD program if you have previously started it for income tax. Generally speaking, you can only choose to opt out if your qualifying income stays below the applicable threshold for three tax years in a row or if you otherwise qualify under HMRC’s regulations.
Do I still need to keep detailed digital records if I only submit summary totals?
Sure. You still need to maintain thorough digital records of every income and cost transaction, even when you report summary totals in your quarterly updates. If necessary, HMRC may request to examine these documents.
Am I exempt from MTD if I am digitally excluded?
You may be, but it is not automatic. HMRC assesses exemption applications individually for reasons such as disability, age, remoteness, or religious grounds. You need to apply directly to HMRC rather than simply deciding not to comply.
Conclusion
One of the most significant adjustments to the UK’s tax reporting system in recent years is Making Tax Digital for Income Tax. Starting on April 6, 2026, self-employed individuals and landlords will have to use software that is compatible with HMRC to maintain digital records and provide quarterly updates. You can avoid penalties and make a confidence move if you know what is needed, when submissions are due, and how the new system operates.
Cox Hinkins can help you through every step of the procedure if you are not sure if MTD applies to you or if you need help with digital record keeping and quarterly reporting. This way, you can stay compliant while concentrating on managing your business.
