Making Tax Digital (MTD) for Income Tax is introducing new digital record-keeping and reporting responsibilities for many sole traders and landlords across the UK. Since April 2026, people included in the first mandatory group have been required to maintain digital financial records and submit quarterly updates to HM Revenue & Customs (HMRC) using compatible software.

The first major submission deadline is 7 August 2026. Preparing in advance, checking financial transactions, and selecting suitable accounting software can help taxpayers adapt to the new system and manage their reporting responsibilities more efficiently.

Understanding the MTD quarterly update requirements helps sole traders and landlords understand what they need to report, organise their financial information, and prepare for upcoming deadlines.

What Are Quarterly Updates Under MTD?

Quarterly updates are digital reports that summarise the income and expenses recorded by a sole trader or property business during the relevant reporting period. These figures are submitted to HMRC through MTD-compatible software.

Unlike an annual Self Assessment tax return, quarterly updates provide HMRC with regular information about business income and expenditure during the tax year.

Under the standard reporting cycle, the first update generally covers the period from 6 April to 5 July 2026, with the submission required by 7 August 2026.

Taxpayers who choose calendar-based quarterly periods may follow different reporting periods. Checking the reporting method selected is important to ensure that each update covers the correct dates.

Who Must Comply With MTD for Income Tax?

From April 2026, MTD for Income Tax became mandatory for sole traders and landlords with qualifying income above £50,000.

The planned next stage is expected to extend the requirements to individuals with qualifying income exceeding £30,000 from April 2027.

Some individuals may be eligible for an exemption, including those whose personal circumstances make it unreasonable or impractical to use digital services.

If you are uncertain whether the rules apply to you, review your qualifying income and consult the latest HMRC guidance to establish your reporting obligations.

What Information Must Quarterly Updates Include?

Quarterly updates generally contain totals for income and expenses captured in digital records during the relevant reporting period.

With the standard reporting method, updates are cumulative. This means the figures submitted cover the period from the beginning of the tax year to the relevant quarter-end, rather than only the latest three months.

Maintaining accurate bookkeeping throughout the year makes this process easier. Recording transactions consistently reduces the risk of missing information and avoids the need to reconstruct several months of financial activity shortly before a deadline.

Property businesses should pay particular attention to organising their records. A service charge accountant's role may involve recording transactions, reviewing financial information, and helping property-related businesses maintain reliable accounts.

Why Prepare Ahead of 7 August 2026?

The 7 August 2026 deadline is the first significant quarterly reporting date for the 2026/27 tax year.

Taxpayers should prepare well in advance by ensuring their transactions have been entered into digital records, income and expenses have been categorised correctly, and their selected software can submit the required information to HMRC.

HMRC has confirmed that late quarterly updates will not attract penalty points during the 2026/27 tax year. However, taxpayers must still meet their quarterly reporting responsibilities. Separate penalties may apply if annual tax returns are submitted late or tax payments are overdue.

Preparing early can help reduce last-minute pressure and make it easier to identify and resolve accounting issues before submission.

Keep Your Digital Financial Records Updated

Maintaining complete and accurate digital records is one of the most effective ways to prepare for MTD.

Updating transactions regularly reduces the amount of work required at the end of each quarter. It also helps taxpayers spot missing documents, incorrect entries, and inconsistencies before submitting their figures.

Depending on the nature of the business, digital records may include:

• Sales and other business income.

• Allowable business expenses.

• Rental income and property-related costs.

• Sales and purchase invoices.

• Bank transactions.

• Accounting entries.

• Receipts and supporting financial documents.

Consistent record keeping gives business owners a clearer understanding of their financial position and helps them prepare more dependable quarterly updates.

Choosing the Right MTD-Compatible Software

Individuals covered by MTD for Income Tax must use compatible software to submit their quarterly updates.

HMRC does not provide the accounting software itself. Taxpayers therefore need to choose an appropriate commercial solution based on their income sources, accounting requirements, and reporting responsibilities.

Before selecting a system, check whether it can handle the relevant types of income and expenditure. The software should also support the digital record-keeping and submission functions required under MTD.

Landlords and property businesses may have more complex accounting requirements than sole traders with straightforward income. Businesses reviewing their financial controls may also find professional audit service support useful when assessing financial records and internal procedures.

Choosing suitable software early allows taxpayers time to become familiar with its features, organise their information, and resolve technical issues before a reporting deadline.

Check Your Financial Figures Before Submission

Although quarterly updates are not annual tax returns, the figures submitted to HMRC must still be based on accurate financial records.

Before submitting an update, review the income and expense categories and confirm that all relevant transactions have been included.

Comparing bookkeeping records against bank statements can help reveal missing receipts, duplicate entries, unrecorded payments, or transactions assigned to incorrect categories.

If an error is discovered, correct the relevant digital records promptly and follow the appropriate process for addressing the issue. This helps reduce the risk of repeated mistakes in later submissions.

Regular checks improve the reliability of quarterly figures and can make preparing the annual tax return more straightforward.

MTD Quarterly Update Deadlines for 2026/27

Taxpayers following the standard reporting cycle should familiarise themselves with the reporting periods and submission deadlines for the 2026/27 tax year.

These dates apply to the standard reporting method.

Taxpayers using calendar-based reporting periods may have different period-end dates, although the corresponding submission deadlines generally remain 7 August, 7 November, 7 February, and 7 May.

Always check which reporting method applies to your circumstances and confirm the relevant deadlines before preparing each submission.

Preparing Landlords and Property Businesses for MTD

Landlords and property businesses should review their accounting procedures before their MTD obligations begin.

Useful preparation steps include recording rental income digitally, categorising property expenses correctly, retaining invoices and receipts, reconciling bank transactions, and confirming that the chosen software meets MTD requirements.

Property managers responsible for service charge funds should pay particular attention to maintaining organised and transparent financial records. Reviewing service charge accounting responsibilities can help property professionals understand the work involved and determine whether specialist accounting assistance would be beneficial.

Businesses should also assess whether they require additional help with bookkeeping, tax planning, compliance checks, or audit-related responsibilities.

Preparing these processes early can make ongoing reporting easier and help property businesses maintain better oversight of their financial information.

Quarterly Updates Do Not Replace the Annual Tax Return

MTD quarterly updates form part of the wider tax reporting process. They do not eliminate other tax or regulatory responsibilities.

Business owners and company directors should continue monitoring their existing obligations while preparing their quarterly figures. For example, reviewing the director ID verification deadline can help company directors understand and prepare for Companies House identity verification requirements.

Taxpayers must still submit their annual Income Tax Self Assessment return, including any necessary adjustments, claims, and declarations.

For the 2026/27 tax year, the annual tax return deadline is 31 January 2028.

MTD should therefore be treated as an ongoing financial management responsibility rather than a task completed only when quarterly submissions are due. Keeping records updated throughout the year is generally more manageable than waiting until a deadline approaches.

How Coxhinkins Can Help With MTD Preparation

Preparing quarterly submissions is easier when financial records are complete and bookkeeping procedures are consistent. Professional accounting assistance can help businesses review transactions, maintain organised records, and understand the reporting responsibilities that apply to them.

Property managers and organisations responsible for service charge accounts may also require specialist support with property accounting and financial compliance.

Coxhinkins can help businesses with accounting and compliance matters as they prepare for the changes introduced by Making Tax Digital.

Before 7 August 2026, review your digital records, confirm that your accounting software is compatible, and make sure your submission process is ready. Taking these steps in advance can simplify quarterly reporting and reduce avoidable accounting errors.

Conclusion

Preparing for MTD quarterly updates requires sole traders and landlords to maintain accurate digital records, understand their reporting periods, and submit information using compatible software. Organising transactions throughout the year can make the process more manageable and help taxpayers meet their responsibilities.

It is also important to check financial figures before submission, monitor the applicable deadlines, and remember that quarterly updates do not replace the annual Self Assessment tax return.

By reviewing accounting procedures early and seeking professional guidance where necessary, taxpayers can approach MTD with greater confidence. Coxhinkins can provide support with relevant accounting and compliance matters, helping businesses establish organised financial processes and prepare for their ongoing reporting responsibilities.