Making Tax Digital (MTD) for Income Tax has become an important change for many UK sole traders and landlords. From April 2026, those within the first mandatory group need to keep digital records and submit quarterly updates using compatible software. The first quarterly update deadline is 7 August 2026, making preparation essential for businesses that need to comply.

Understanding the MTD quarterly update requirements can help sole traders, landlords and property businesses organise their records, choose appropriate software and avoid last-minute problems.

What Are MTD Quarterly Updates?

Quarterly updates are summaries of business income and expenses sent to HM Revenue & Customs (HMRC) through compatible software. They are not tax returns. HMRC explains that the updates contain totals for income and expense categories for each relevant self-employment or property business.

For standard update periods, the first period runs from 6 April to 5 July 2026, with the update due by 7 August 2026. Businesses using calendar update periods may instead have a first period from 1 April to 30 June, which also has a 7 August deadline.

Who Needs to Submit Quarterly Updates?

MTD for Income Tax became mandatory from April 2026 for sole traders and landlords with qualifying income above £50,000. The rules are scheduled to expand to people with qualifying income above £30,000 from April 2027.

There are exemptions for certain taxpayers, including some people who are digitally excluded. Anyone unsure about whether they fall within the requirements should check their position and HMRC guidance before the relevant deadline.

What Needs to Be Included?

Quarterly updates generally contain totals for income and expenses recorded digitally for the relevant business. HMRC states that quarterly updates are cumulative, meaning each update covers the period from the start of the tax year through to the end of that update period.

This makes accurate bookkeeping particularly important. Transactions should be categorised correctly and supporting records should be maintained throughout the year rather than reconstructed shortly before a deadline.

For property managers and landlords dealing with service charge-related financial responsibilities, professional accounting support can also be useful. A service charge accountant's role can involve maintaining accurate records, reviewing transactions and helping ensure financial information is properly organised.

Why the 7 August 2026 Deadline Matters

The first quarterly update deadline for the 2026/27 tax year is 7 August 2026. HMRC confirmed that the first update covers the first three months of the tax year for most customers.

Businesses should therefore avoid treating the deadline as simply a submission date. The preparation needs to happen beforehand. Digital records should be complete, transactions should be reviewed and compatible software should be ready to submit the information.

Although HMRC has confirmed that penalty points will not be issued for late quarterly updates during the 2026/27 tax year, taxpayers still have to submit their quarterly updates before they can submit the relevant tax return. Penalties can still apply to late tax returns and late payments.

Keep Digital Records Up to Date

One of the most important preparation steps is maintaining digital records throughout the accounting period. HMRC advises that digital records should be created as close to the transaction date as possible.

This approach can reduce the amount of work required before each quarterly deadline. It can also make it easier to identify missing transactions, incorrect categories and unusual figures before submitting an update.

Businesses should consider keeping records for:

• Sales and other business income

• Business expenses

• Property income and expenses where relevant

• Supporting invoices and receipts

• Bank transactions

• Other information required by their accounting software

Choose Compatible Accounting Software

MTD quarterly updates must be submitted using compatible software. HMRC does not provide the accounting software itself, so businesses need to choose an appropriate commercial solution.

The software should support the type of income and records involved in the business and should allow information to be submitted to HMRC.

This is particularly important for property-related businesses that may already have complex financial records. Where audit requirements also apply, businesses may benefit from professional audit service support to strengthen their financial review and reporting processes.

Review Your Figures Before Submission

A quarterly update is not a replacement for year-end tax reporting, but the information submitted still needs to be accurate. Before submission, review income and expense categories and check that important transactions have not been omitted.

It is also useful to compare accounting records with bank transactions. Differences can highlight missing income, duplicated expenses or transactions that have been incorrectly categorised.

Businesses should correct errors in their digital records when they become aware of them rather than allowing inaccuracies to accumulate. HMRC's guidance specifically states that digital records should be corrected as soon as possible when an error is identified.

What Are the Other Quarterly Deadlines?

For the 2026/27 tax year, the standard quarterly update deadlines are:

These deadlines apply to standard update periods. Businesses using calendar update periods have different period-end dates, although the corresponding submission deadlines remain 7 August, 7 November, 7 February and 7 May.

How Can Property Businesses Prepare?

Property businesses should review their accounting processes before each quarterly update. This may include separating property income and expenses, maintaining supporting documents, reconciling bank transactions and ensuring that the software being used is compatible with MTD.

Where property managers are responsible for service charge accounting, having clearly organised financial records is especially important. Understanding service charge accounting responsibilities can help property professionals identify where specialist accounting input may be required.

Businesses should also consider whether they need additional services such as bookkeeping, tax planning, compliance reviews or audit support.

What Happens After the Quarterly Updates?

Businesses should also keep track of other compliance changes that may affect directors and company administration. For example, understanding the director ID verification deadline can help company directors prepare for Companies House identity verification requirements and avoid leaving important compliance steps until the last minute.

Quarterly updates do not replace the annual tax return. Taxpayers still need to complete their tax return and make any necessary adjustments, claims or declarations at the appropriate stage.

For the 2026/27 tax year, HMRC's guidance states that the relevant tax return is due by 31 January 2028.

This means businesses should view MTD as an ongoing accounting process rather than a task that only needs attention four times a year.

How Coxhinkins Can Help

Preparing for MTD quarterly updates can be easier when your accounting records are maintained consistently throughout the year. Professional support can help businesses organise records, review transactions, understand reporting requirements and prepare for upcoming deadlines.

For property managers and businesses dealing with service charges, accounting expertise can also support accurate reporting and financial administration. Coxhinkins can assist businesses with accounting and compliance requirements while helping them prepare for changes such as Making Tax Digital.

The key step before 7 August 2026 is to make sure your digital records, accounting software and reporting processes are ready. Taking action early can make each quarterly update more manageable and reduce the risk of avoidable errors.