Making Tax Digital for Income Tax: A guide to quarterly updates

Making Tax Digital for Income Tax (MTD) has changed how some sole traders and landlords report their income and expenses to HMRC. If it applies to you, you must keep digital records, send quarterly updates using compatible software and submit a tax return after the tax year ends.

Who needs to use MTD for Income Tax?

MTD for Income Tax is being introduced in stages for sole traders and landlords. Your start date depends on your qualifying income: your combined income from self-employment and property before expenses are deducted.

Qualifying income	Tax year used to assess it	MTD start date
More than £50,000	2024/25	6 April 2026
More than £30,000	2025/26	6 April 2027
More than £20,000	2026/27	6 April 2028

If you have both a sole trader business and rental income, the income is considered together when checking the threshold. Limited companies are outside MTD for Income Tax.

What is a quarterly update?

A quarterly update is a summary of the income and expense categories in your digital records. Your MTD-compatible software calculates the totals for you to check and send to HMRC. If you have more than one business or property income source, you send a separate update for each one.

The updates are cumulative. Your second update, for example, covers the start of the tax year through to the end of the second reporting period. This means you can correct an earlier entry in your records and include the corrected totals in a later update.

A quarterly update is not a tax return. You do not make year-end tax adjustments before sending it, and submitting one does not trigger an immediate tax payment.

When are the quarterly updates due?

For someone using the standard tax-year reporting periods, the 2026/27 deadlines are:

Period covered by the update	Deadline
6 April to 5 July 2026	7 August 2026
6 April to 5 October 2026	7 November 2026
6 April 2026 to 5 January 2027	7 February 2027
6 April 2026 to 5 April 2027	7 May 2027

Calendar reporting periods are also available. They run from 1 April, but the submission deadlines are the same. If you want to use calendar periods, select them in your software before sending your first update.

What happens at the end of the tax year?

You still need to complete a tax return after your final quarterly update. This is where you confirm your full tax position, including relevant adjustments, reliefs and other income. For the 2026/27 tax year, the tax return deadline is 31 January 2028.

You also need to file your Self Assessment return for the tax year before you started using MTD. Starting quarterly updates does not remove that earlier filing obligation.

How can you prepare?

Start by checking your MTD start date and choosing compatible software. Then keep your sales and expense records up to date throughout the year. Reviewing them regularly is easier than sorting through a year’s worth of transactions just before a deadline.

Vau Consult helps sole traders with digital bookkeeping, software setup and organised income and expense records. Get a quote if you would like help preparing for MTD for Income Tax.

This guide provides general information. Your reporting obligations depend on your circumstances; check the current HMRC guidance if you are unsure.