Making Tax Digital (MTD) for Income Tax requires eligible sole traders and landlords to keep digital records and send quarterly updates to HMRC using compatible software. These updates summarise business income and expenses—they are not tax returns. Keeping records accurate and up to date can make each submission simpler and help you monitor your finances throughout the year.

Who Needs to Send MTD Quarterly Updates?

MTD for Income Tax became mandatory from 6 April 2026 for sole traders and landlords whose qualifying income from self-employment and property was over £50,000 in the relevant previous tax return. The threshold is scheduled to reduce to over £30,000 from April 2027 and over £20,000 from April 2028.

MTD Quarterly Update Deadlines

For most users following standard tax-year update periods, the deadlines are:

If your accounting period runs from 1 April to 31 March, you may use calendar update periods instead. The submission deadlines remain the same. Check your software settings or ask your accountant which periods apply to you.

What Records Should You Keep?

MTD-compatible software uses your digital records to calculate totals for each income and expense category. Keep your records current and retain supporting information such as invoices, receipts and bank transaction details.

Useful records include:

• Business income and sales
• Allowable business expenses
• Dates and amounts of transactions
• Records for each self-employment or property business you have

Quarterly updates report category totals, not individual receipts or invoices. If you have no income or expenses during a period, you must still send an update.

Common MTD Mistakes to Avoid

Leaving bookkeeping until the deadline: Update records regularly rather than trying to reconstruct a whole quarter at once.

Using the wrong update period: Confirm whether your software is set to standard or calendar periods before sending your first update.

Missing income or expenses: Check bank transactions, invoices and receipts before submitting.

Assuming quarterly updates replace the tax return: You must still complete and submit your annual tax return through compatible software.

Ignoring errors after submission: Correct errors or omissions in your digital records and provide corrected information through your software.

What Happens If You Miss a Deadline?

HMRC says it will not apply penalty points for late quarterly updates during the 2026–27 tax year. However, you still need to submit all required updates before submitting your tax return, and separate penalties can apply for late tax returns or payments. From the second year onwards, missed quarterly deadlines can lead to penalty points; reaching the threshold can trigger a £200 penalty.

How Hmr Accountancy Can Help

Hmr Accountancy can support UK sole traders with digital bookkeeping, MTD-compatible software, quarterly submissions and tax-return preparation. Professional support can help you keep records organised, check submissions and stay aware of upcoming deadlines.

Need help with MTD quarterly updates? Contact Hmr Accountancy to discuss support for your bookkeeping and tax reporting.

FAQs

1. Are MTD quarterly updates the same as tax returns?

No. Quarterly updates are summaries of income and expenses. You must still submit an annual tax return through compatible software.

2. What is the next MTD quarterly update deadline?

For standard update periods, the next deadline after 4 November 2026 is 7 November 2026, covering the period from 6 April to 5 October.

3. Do I need to send an update if I had no transactions?

Yes. HMRC says you must still send the quarterly update even if you had no income or expenses during the period.

4. Can I correct an MTD quarterly update?

Yes. If you find an error or omission, correct the digital record using compatible software and provide the corrected information to HMRC.

5. Will I be fined for a late quarterly update in 2026–27?

HMRC will not apply penalty points for late quarterly updates during 2026–27. This does not remove the requirement to submit updates or the separate rules for late tax returns and payments.