Making Tax Digital for Income Tax - Understanding Quarterly Updates
From 6 April 2026, Making Tax Digital for Income Tax (MTD for Income Tax) is mandatory for sole traders and landlords with annual income over £50,000.
Under MTD for Income Tax, taxpayers are required to keep digital records and submit quarterly updates to HMRC using MTD-compatible software. But what are quarterly updates, and when is the first filing for 2026/27 due?
What is in a quarterly update?
MTD for Income Tax requires sole traders and landlords to report on a quarterly basis to HMRC.Each update is cumulative across the year. That means that, for each update period, you will report:
- your self-employment or property income and expenses from the previous three months,
- plus the total of your previously reported trade or property income and expenses for the tax year,
- and any corrections made to those figures.
No accounting or tax adjustments are necessary before sending a quarterly update to HMRC.
What are the update periods?
There are two update periods under MTD for Income Tax. The standard update period is based on the tax year, and looks as follows:
However, if a taxpayer chooses (and if their MTD software has the capability) it’s possible to send quarterly updates on a calendar basis instead. This can be particularly useful for businesses that prepare accounts to 31 March.
The submission period for a calendar update period is:
In both cases, the submission deadline is the same. This means a business using a calendar update period actually has a few extra days each quarter to prepare their update.
Do I need to submit anything other than quarterly updates?
Yes. After the fourth quarterly update has been filed, you should make any tax or accounting adjustments to your figures, as well as add in any additional income sources that aren’t reported as part of MTD for Income Tax (e.g. pension income, employment income, interest income etc), and claim any tax reliefs to which you’re entitled, such as capital allowances.
This is known as the ‘final declaration’ and works as the MTD version of your self-assessment tax return. The deadline to submit a final declaration is the same as the online filing deadline for self-assessment tax returns – 31 January following the tax year end.
I am a sole trader and also receive property income. Do I need to submit multiple quarterly updates?
Yes. Separate quarterly updates need to be submitted for each trade or property business. That means if you earn trading income as well as rental income, you will need to send 8 quarterly updates across the tax year.
Need help with Making Tax Digital for Income Tax?
Looking for more information on what you need to include in your quarterly updates? Book some time to speak with a member of our team today – we’d be happy to guide you through the Making Tax Digital filing process.
