If you are a sole trader or landlord with qualifying gross income above £50,000 in the 2024/25 tax year, you must now send quarterly updates to HMRC using MTD-compatible software. The four standard submission deadlines each year fall on 7 August, 7 November, 7 February, and 7 May. These updates are not tax returns. They are cumulative digital summaries of your income and expense category totals, sent directly through your software. Your final declaration and payment dates remain unchanged.
Key dates at a glance:
- 7 August 2026 — first quarterly update deadline (covering 6 April–5 July 2026)
- 7 November 2026 — second quarterly update deadline
- 7 February 2027 — third quarterly update deadline
- 7 May 2027 — fourth quarterly update deadline
- 31 January 2027 — Self Assessment tax return deadline for 2025/26 (usual route, final year before MTD filing)
- 31 January 2028 — first year-end final declaration submitted directly through MTD software (for 2026/27)
This making tax digital quarterly reporting overview covers everything you need: who is affected, exactly what to send, how to link your software, and a practical checklist to keep you on track.
Table of Contents
- What are quarterly updates under MTD for Income Tax?
- Who needs to send quarterly updates?
- What are the exact deadlines and update periods?
- What figures do you include in each quarterly update?
- How do you sign up and choose compatible software?
- How to send a quarterly update: step by step
- How quarterly updates fit with your final declaration and tax payments
- Common mistakes and how to avoid them
- Your quarter-by-quarter compliance checklist
- When should you get professional help with MTD?
- Key takeaways
- Why the real challenge is not the filing — it is the mindset shift
- Cwabc makes MTD straightforward for sole traders and landlords
- Useful sources and further reading
- Need help?
What are quarterly updates under MTD for Income Tax?
Quarterly updates are not a new type of tax return. They are digital summaries of your business income and expenses, grouped into the same categories you already use on your Self Assessment return.
Every three months, your MTD-compatible software pulls together your digital records and produces totals for each income and expense category. Those totals are then sent to HMRC automatically through the software. No manual entry on GOV.UK, no Government Gateway submission form.
What quarterly updates do not include:
- Tax adjustments or reliefs (these go in the final declaration)
- Personal allowances or pension contributions
- Employment income, savings interest, or dividend income
- Capital gains
A practical example helps here. Say you are a sole trader running a small plumbing business. At the end of the first quarter (6 April–5 July), your software shows £14,200 in invoiced income and £3,800 in allowable expenses across categories such as materials, travel, and tools. You review those totals, confirm they match your records, and send them. That is your first quarterly update. No tax calculation, no payment due at that point.
For landlords, the same logic applies. Your software summarises rental income received and allowable property expenses such as repairs, letting agent fees, and insurance. Finance costs (mortgage interest) are reported separately as a distinct category, not mixed with general expenses.
Who needs to send quarterly updates?
Eligibility is based on your qualifying income, which is your gross (before expenses) income from self-employment and property combined. It does not include employment pay, savings interest, dividends, or partnership share of profits.
The rollout is phased by threshold:
- Over £50,000 qualifying income in 2024/25 → MTD applies from 6 April 2026
- Over the coming years, the qualifying income threshold for MTD eligibility will reduce in phases, affecting more taxpayers each year.
HMRC checks your previous year’s Self Assessment return to determine whether you cross the threshold. If your qualifying income is above the relevant figure, HMRC will write to you. However, even if you do not receive a letter, it is still your responsibility to check whether you need to sign up. You can use the GOV.UK eligibility tool to confirm your position.
You need to send a separate quarterly update for each source of income — so if you have two self-employed trades and a rental property, that is three sets of updates per quarter.
The ‘sticky’ rule: once in, you generally stay in
Once you enter MTD, you cannot simply opt out if your income dips below the threshold the following year. Under ICAEW guidance, a taxpayer whose income drops below the threshold must generally continue using MTD for three consecutive tax years before they can exit. The only exceptions involve cessation of all qualifying income sources, and you must notify HMRC before the start of the next tax year.
Treat entry into MTD as a lasting change to how you manage your books, not a temporary adjustment.
For a fuller picture of which business types are affected and the phased timetable, the Cwabc guide on types of businesses affected by MTD is a useful starting point.
What are the exact deadlines and update periods?
There are two update period options. Most people will use standard update periods, which align with the tax year (6 April to 5 April). The alternative is calendar update periods (1 April to 31 March). Whichever you choose, the submission deadlines remain the same: the 7th of the month following the end of each quarter.
Standard update periods and deadlines
| Quarter | Period covered | Submission deadline |
|---|---|---|
| Quarter 1 | 6 April – 5 July | 7 August |
| Quarter 2 | 6 July – 5 October | 7 November |
| Quarter 3 | 6 October – 5 January | 7 February |
| Quarter 4 | 6 January – 5 April | 7 May |
For those entering MTD from April 2026, the first quarterly update deadline is 7 August 2026, covering income and expenses from 6 April to 5 July 2026.
Worked example: You are a landlord who started using MTD on 6 April 2026. Between April and 5 July, you received £4,500 in rent and paid £620 in repairs and £180 in letting agent fees. By 7 August, your software sends those totals to HMRC as your first quarterly update. No payment is due at that point.
A few practical points on timing:
- You can submit before the deadline once you are confident no further transactions will fall in that period.
- You can submit up to 10 days before the period end if no further transactions are expected.
- Late submission may attract a penalty point (more on that below).
What figures do you include in each quarterly update?
Each update contains cumulative year-to-date totals for your income and expense categories, not just the figures for that individual quarter. This is an important detail. By the time you send your fourth update, it reflects the full year’s totals, not just the final three months.
Required categories typically include:
- Income: turnover or rental income received
- Expenses: allowable business costs grouped by category (travel, office costs, repairs, professional fees, and so on)
- Finance costs (landlords only): mortgage interest and loan interest reported as a separate line
What you do not include in quarterly updates:
- Personal tax reliefs or allowances
- Pension contributions
- Capital allowances claims
- Employment income or PAYE details
- Savings or investment income
Because updates are cumulative, correcting an error is straightforward. If you mis-categorised an expense in quarter one, simply correct it in your records before sending quarter two. The updated year-to-date total automatically replaces the earlier figure. You do not need to resubmit quarter one separately.
Pro Tip: Treat the estimated tax figure your software shows after each update as a working cashflow tool, not a final bill. Set aside that estimated amount each quarter so you are never scrambling for cash in January.
How do you sign up and choose compatible software?
You cannot submit quarterly updates through the old Government Gateway. Linking compatible software to your HMRC account is mandatory, and the process involves an identity check. Set this up well before your first deadline to avoid last-minute delays.
Sign-up checklist
- Confirm your obligation using the GOV.UK eligibility tool
- Choose HMRC-recognised MTD software from the approved list on GOV.UK
- Sign up on GOV.UK and complete the identity verification steps
- Authorise your software to connect to your HMRC account (or ask your agent to link via their Agent Services Account)
- Test the connection before the first period closes
When choosing software, prioritise these features:
- Direct API connection to HMRC (not just spreadsheet export)
- Support for multiple income sources if you have more than one trade or property
- Year-end final declaration filing capability
- Clear category mapping that matches Self Assessment categories
- An estimated tax bill display after each update
Some products also include HMRC Assist, which provides tailored feedback before you submit, flagging likely errors before they become a problem.
If you are unsure which product suits your situation, the Cwabc sole trader transition guide walks through the practical steps of moving to MTD software, and the MTD requirements checklist covers what you need to have in place before your first submission.
How to send a quarterly update: step by step
Most MTD-compatible software follows a similar process. Here is a practical sequence you can follow at the end of each quarter.
- Close the period in your records. Stop adding transactions to the quarter once the period end date passes (or up to 10 days before if you are confident the period is complete).
- Reconcile your bank account. Match every bank transaction to a record in your software. Unreconciled items are the most common cause of incorrect totals.
- Check category totals. Review each income and expense category. Make sure nothing is miscategorised — for example, a capital purchase sitting in repairs, or a personal expense in business costs.
- Review the pre-populated summary. Your software will display the year-to-date totals it intends to send. Compare these against your own running totals or a simple spreadsheet check.
- Connect to HMRC and send. Authorise the submission within your software. You will receive a confirmation reference.
- Note the estimated tax figure. After submission, your software or HMRC online services account will display an estimate of tax due on your self-employment and property income to date.
Quick reconciliation checklist before you send
- All bank receipts matched to invoices or income records
- All expense receipts logged and categorised correctly
- Bank balance in software matches actual bank statement balance
- No personal transactions included in business records
- Finance costs (for landlords) entered as a separate category
How quarterly updates fit with your final declaration and tax payments
Quarterly updates feed information into your final declaration, but they do not replace it. The final declaration is where you add tax adjustments, reliefs, personal allowances, and any other income sources not covered by quarterly updates (such as employment income or savings interest).
The deadline for the final declaration is 31 January following the end of the tax year — the same date as the current Self Assessment filing deadline. For the 2026/27 tax year, that means 31 January 2028.
Payment dates also remain unchanged:
- 31 January — balancing payment for the previous tax year, plus first payment on account for the current year
- 31 July — second payment on account
The estimates your software produces after each quarterly update are genuinely useful for planning. By the time you reach quarter three, you have a reasonably accurate picture of your likely tax bill for the year. That gives you time to set money aside, adjust payments on account if appropriate, or speak to an accountant before January arrives.
For landlords, the annual tax return process sits alongside quarterly updates rather than being replaced by them. The final declaration is still where property finance costs restrictions and other adjustments are applied.
Common mistakes and how to avoid them
MTD quarterly reporting is straightforward once your systems are set up, but a few recurring errors catch people out, particularly in the first year.
Not linking software to HMRC before the deadline. The identity verification and authorisation process takes time. People who leave this until the week before 7 August often find themselves unable to submit on time. Set up the link at least four weeks before your first deadline.
Mis-classifying expenses. Putting a capital purchase (a new laptop, for example) into day-to-day expenses inflates your costs for the quarter. Capital items are claimed through capital allowances in the final declaration, not as expenses in quarterly updates. A simple category mapping template, set up once in your software, prevents this.
Forgetting jointly-owned property rules. If you own a rental property jointly with a spouse or partner, each owner must submit their own quarterly updates for their share of the income. The default split is 50/50 unless you have filed a Form 17 with HMRC to declare a different beneficial interest. Missing this means one partner may be over-reporting and the other under-reporting.
Treating updates as individual quarterly figures rather than cumulative totals. Some people enter only the current quarter’s transactions rather than checking that the year-to-date total is correct. Because updates are cumulative, an error in quarter one compounds through every subsequent update unless you correct it in your records.
Pro Tip: Set a recurring calendar reminder for the 25th of July, October, January, and April — ten days before each deadline. Use that day to reconcile your accounts, check category totals, and send the update early. You will never be scrambling at 11pm on the 7th.
For a deeper look at avoiding classification errors, the Cwabc guide on avoiding bookkeeping errors is worth bookmarking.
Your quarter-by-quarter compliance checklist
Good record-keeping throughout the quarter makes the actual submission take minutes rather than hours. Here is a practical checklist and calendar template you can copy into your diary.
Before each quarter closes
- [ ] All sales invoices or rental receipts logged in your software
- [ ] All expense receipts photographed and categorised
- [ ] Bank account reconciled to the period end date
- [ ] Finance costs (landlords) entered as a separate category
- [ ] Any jointly-owned property income split correctly
- [ ] Capital purchases identified and excluded from expense categories
Calendar reminders to add now
| Reminder date | Action |
|---|---|
| 25 July | Reconcile Q1 records; send update by 7 August |
| 25 October | Reconcile Q2 records; send update by 7 November |
| 25 January | Reconcile Q3 records; send update by 7 February |
| 25 April | Reconcile Q4 records; send update by 7 May |
| 1 December | Gather year-end adjustments for final declaration |
| — | Complete and submit final declaration (deadline 31 January) |
Record structure that makes updates almost automatic
The closer your bookkeeping categories match the Self Assessment categories HMRC expects, the less manual work each submission involves. Set up your software chart of accounts once, using the standard categories, and every transaction you record throughout the year feeds directly into the quarterly totals. You are not doing extra work at quarter end; you are simply confirming what your software has already calculated.
The Cwabc MTD quarterly reporting guide includes a category mapping template you can use as a starting point.
When should you get professional help with MTD?
MTD quarterly reporting is manageable if your finances are straightforward. But there are situations where professional support pays for itself quickly.
Complex property portfolios. If you own multiple rental properties, some jointly, some in your sole name, and some furnished holiday lets, the number of separate quarterly updates multiplies fast. Getting the income splits and expense categories right across all of them is time-consuming and easy to get wrong.
Multiple self-employed trades. Each trade requires its own set of quarterly updates. If you run two businesses with different expense profiles, a single software setup may not handle the category mapping cleanly without some configuration.
Late transition to MTD. If you have not yet signed up and your first deadline is approaching, the combination of software selection, identity verification, and historical record migration can feel like a lot to handle alone.
Repeated missed deadlines. Under the points-based penalty system, four penalty points trigger a £200 fixed penalty. If you have already missed one or two deadlines, getting a system in place quickly matters.
Cwabc supports sole traders and landlords in Tonbridge and across Kent with MTD sign-up, software linking, ongoing quarterly submissions, and year-end final declaration filing. Whether you need a one-off setup session or ongoing monthly bookkeeping, the support is tailored to your situation with clear, upfront pricing. If you are a landlord wondering whether professional help is worth it, the Cwabc guide on the role of an accountant for landlords sets out exactly what that support looks like in practice.
For a no-obligation conversation about your MTD obligations, get in touch with Cwabc.
Key takeaways
MTD for Income Tax requires sole traders and landlords above the qualifying income threshold to send four cumulative quarterly updates per year using HMRC-recognised software, with the first deadline for 2026 entrants falling on 7 August 2026.
| Point | Details |
|---|---|
| Four annual deadlines | Quarterly updates are due on 7 August, 7 November, 7 February, and 7 May each year. |
| Cumulative totals only | Each update contains year-to-date income and expense category totals, not individual quarter figures. |
| Software link is mandatory | You cannot submit through the Government Gateway; compatible software must be authorised and linked to HMRC before your first deadline. |
| Sticky rule applies | Once in MTD, you generally remain for three consecutive tax years even if your qualifying income falls below the threshold. |
| Cwabc can help | Cwabc provides MTD setup, quarterly submission support, and year-end filing for sole traders and landlords in Tonbridge and Kent. |
Why the real challenge is not the filing — it is the mindset shift
Most of the anxiety around MTD quarterly reporting comes from treating it as four extra tax returns per year. It is not. It is closer to sending your bank a monthly statement: a summary of what happened, with no tax calculation required from you at that point.
The genuine challenge is the shift it demands in how you keep records. Under the old Self Assessment system, you could leave your bookkeeping until January and reconstruct the year from a shoebox of receipts. MTD ends that approach. Not because HMRC is being punitive, but because the system only works if your digital records are current. A quarterly update sent from records that are three months out of date is almost always wrong, and correcting it takes more time than keeping up with it would have.
What practitioners see most often is not people struggling with the software. It is people who have not changed their underlying record-keeping habits and then find themselves doing three months of catch-up bookkeeping every quarter. The solution is not better software. It is a weekly or fortnightly habit of logging receipts and reconciling the bank. Ten minutes twice a week beats three hours at quarter end.
The estimates MTD produces after each update are also underused. Seeing a realistic tax figure in October rather than January gives you time to plan, adjust payments on account, or make pension contributions before the year closes. That is a genuine benefit of the system, and one that most people only discover after their first year in it.
Cwabc makes MTD straightforward for sole traders and landlords
Getting your MTD setup right from the start saves a significant amount of stress later. Cwabc offers a done-for-you approach to quarterly reporting: from choosing and linking your software to HMRC, to sending each quarterly update on time, to completing your year-end final declaration. There are no hidden fees and no jargon, just clear support from a licensed bookkeeper and accountant who works with sole traders and landlords in Tonbridge and Kent every day.
Whether you are just entering MTD for the first time or you have already missed a deadline and need to get back on track, Cwabc can help you put a system in place that works. If you are not sure whether you need ongoing support or just a one-off setup, the signs your bookkeeping needs professional help guide is a good place to start. For landlords specifically, the landlord bookkeeping guide covers the record-keeping requirements in detail.
Ready to get sorted? Contact Cwabc for a free, no-obligation conversation about your MTD obligations.
Useful sources and further reading
- Quarterly updates: Making Tax Digital for Income Tax (GOV.UK)
- Find out if and when you need to use MTD for Income Tax (GOV.UK)
- Work out your qualifying income for MTD (GOV.UK)
- MTD for Income Tax update notice (GOV.UK)
- Deadline approaches for first MTD quarterly update (GOV.UK)
- Making Tax Digital: who needs to use MTD? (ICAS)
- TAXguide 04/25: MTD for Income Tax — questions and answers (ICAEW)
- Making Tax Digital for Income Tax: step-by-step guide (GOV.UK)
- Cwabc MTD explained: 2026 UK guide
- Cwabc MTD requirements checklist for 2026
Need help?
If you have questions about your MTD obligations or want support getting set up, contact Cwabc for a free, no-obligation conversation. Based in Tonbridge and working with sole traders and landlords across Kent, Cwabc offers clear, practical support with no jargon and no surprises on the bill.
This article provides general information about Making Tax Digital for Income Tax and is not a substitute for professional advice. Tax rules can change, and your individual circumstances may affect what applies to you. Always verify current requirements with HMRC or a qualified tax professional.
