Making Tax Digital (MTD) for Income Tax is changing how many UK sole traders and landlords record financial information and report income to HM Revenue & Customs (HMRC). From April 2026, the first group of taxpayers within the mandatory rules must maintain digital records and submit quarterly updates using compatible accounting software.

The first key submission date is 7 August 2026. Preparing bookkeeping records, reviewing transactions and setting up the right accounting software before this date can help taxpayers manage the new reporting process with greater confidence.

Understanding the MTD quarterly update requirements allows individuals and businesses to identify their responsibilities, organise their financial records and prepare for upcoming submissions.

What Is an MTD Quarterly Update?

An MTD quarterly update is an electronic summary of the income and expenses recorded by a business or property business over a specified reporting period. The information is sent to HMRC through compatible software.

A quarterly update should not be confused with a tax return. Its purpose is to provide HMRC with regular information about income and expenditure during the tax year.

Under the standard reporting timetable, the first update generally covers the period from 6 April to 5 July 2026 and must be submitted by 7 August 2026.

Taxpayers who use calendar-based update periods may follow different reporting dates. Nevertheless, the first submission deadline can still be 7 August, depending on the applicable reporting arrangements.

Who Needs to Follow 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 expansion of the rules means that, from April 2027, the threshold is scheduled to fall to qualifying income above £30,000.

Some taxpayers may qualify for an exemption, including individuals who cannot reasonably use digital systems because of their circumstances.

If you are unsure whether the requirements apply to you, review your income position and the latest HMRC guidance before your relevant reporting obligations begin.

What Details Must Be Included in Quarterly Updates?

Quarterly updates generally report totals for income and expenses recorded digitally during the relevant period.

Under the standard approach, updates are cumulative. Each submission includes information covering the tax year from its start up to the end of the relevant reporting period.

Accurate bookkeeping is therefore essential. Keeping records updated throughout the year is usually more manageable than trying to reconstruct several months of transactions just before a submission deadline.

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

Why Is 7 August 2026 an Important Date?

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

However, taxpayers should not leave their preparations until the final few days. They need to ensure that transactions have been recorded digitally, income and expenses have been classified appropriately and their accounting software is ready to submit the required information to HMRC.

HMRC has confirmed that late quarterly updates will not attract penalty points during the 2026/27 tax year. This temporary arrangement does not remove the obligation to submit quarterly updates. Separate penalties may still apply if taxpayers file their annual tax returns late or fail to pay tax by the relevant deadline.

Keep Digital Records Up to Date

One practical way to prepare for quarterly reporting is to maintain accurate financial records throughout the year.

Recording transactions regularly helps reduce the amount of work required at the end of each reporting period. It also makes it easier to identify missing information and resolve errors before submitting an update.

Depending on the business, digital records may include:

• Sales revenue and other business income

• Allowable business expenses

• Rental income and property-related expenditure

• Sales and purchase invoices

• Bank transactions

• Relevant accounting entries

• Supporting receipts and financial documents

Regular bookkeeping provides a clearer picture of business performance and helps taxpayers prepare their quarterly figures more efficiently.

Choosing Software That Supports MTD

Taxpayers who fall within MTD for Income Tax must use compatible software to submit their quarterly updates.

HMRC does not supply the accounting software itself. Individuals and businesses therefore need to select a suitable commercial product that meets the requirements of their activities.

Before choosing a package, consider whether it can manage your income sources, expense categories and reporting needs. It is also worth checking whether the software supports the necessary digital record-keeping and submission functions.

Property businesses may have more detailed accounting needs than sole traders with straightforward income. Businesses reviewing the reliability of their accounting procedures may also benefit from professional audit service support when assessing financial records and internal processes.

Review Your Figures Before Submitting

Although quarterly updates are not annual tax returns, the information submitted to HMRC should still be supported by accurate records.

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

Bank reconciliation is particularly helpful. Comparing accounting records with bank statements can highlight missing payments, duplicate entries or transactions that have been allocated incorrectly.

If you discover a mistake, update the relevant digital records promptly rather than allowing the error to affect later reporting periods.

A consistent review process can improve the reliability of the information submitted and make year-end tax preparation easier.

MTD Quarterly Update Deadlines for 2026/27

Taxpayers following the standard reporting cycle should be aware of the following schedule:

These dates relate to the standard reporting approach.

Individuals using calendar-based reporting periods may have different period-end dates. The corresponding quarterly submission deadlines are generally 7 August, 7 November, 7 February and 7 May.

Taxpayers should check which reporting arrangement applies to their circumstances and confirm the relevant dates before relying on a timetable.

Getting Property Businesses Ready for MTD

Landlords and other property businesses should review their existing accounting procedures before they become subject to quarterly reporting.

Preparation may include recording rental income digitally, categorising property expenses, keeping invoices and receipts, reconciling bank accounts and confirming that accounting software meets MTD requirements.

For property managers responsible for service charge finances, well-organised records are especially important. Reviewing service charge accounting responsibilities can help property professionals understand the accounting tasks involved and identify situations where specialist support may be beneficial.

Businesses should also assess whether they need assistance with bookkeeping, tax planning, compliance reviews or audit-related requirements.

Quarterly Updates Do Not Replace Annual Tax Returns

MTD quarterly reporting is one element of a wider tax compliance process. It does not remove the need to meet other tax and regulatory obligations.

Business owners and company directors should continue monitoring their responsibilities alongside their quarterly submissions. For example, understanding the director ID verification deadline can help company directors prepare for the identity verification requirements introduced by Companies House.

Quarterly updates do not replace the annual Income Tax Self Assessment return. Taxpayers must still complete their annual return and account for relevant adjustments, reliefs 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 accounting responsibility rather than a task that only needs attention when a quarterly submission date approaches.

How Coxhinkins Can Help Businesses Prepare

Preparing for quarterly reporting is easier when financial information is organised and bookkeeping records are maintained consistently. Professional accounting support can help businesses review transactions, maintain accurate records and understand their reporting responsibilities.

Property managers and businesses dealing with service charge accounts may also benefit from specialist knowledge of property accounting and financial compliance.

Coxhinkins can assist businesses with accounting and compliance requirements while helping them prepare for changes such as Making Tax Digital.

Before 7 August 2026, prioritise completing your digital records, checking that your accounting software is suitable and establishing a reliable reporting process. Taking these steps early can make quarterly submissions easier to manage and reduce the risk of avoidable bookkeeping errors.