Making Tax Digital (MTD) for Income Tax became a reality on 6 April 2026 for sole traders and landlords with annual combined business and property income exceeding £50,000. While much of the discussion to date has focused on preparing for the new regime, attention is now turning to the first major reporting milestone.
For those within the scope of MTD for Income Tax, the first quarterly update is due by 7 August 2026.
As this first deadline approaches, now is the time to ensure your records are up to date and your digital reporting processes are working as they should.
What is the first quarterly update?
The first quarterly update represents the beginning of a new way of reporting income to HM Revenue & Customs (HMRC).
Under MTD for Income Tax, individuals are required to maintain digital records and submit quarterly updates to HMRC using compatible software.
- The first reporting period covers income and expenses from 6 April 2026 to 5 July 2026;
- With the quarterly update due by 7 August 2026.
Unlike a traditional Self Assessment tax return, a quarterly update is not intended to calculate your tax bill. Instead, it provides HMRC with a summary of your business or property income and expenditure for the reporting period.
Key facts
- Every three months, compatible software summarises your digital records into income and expense totals which are then submitted to HMRC as a quarterly update; and
- Once signed up to MTD for Income Tax, you must submit a separate quarterly update for each source of qualifying income (self-employment and property).
Common misconceptions about MTD quarterly updates
As individuals adapt to MTD for Income Tax, many are still seeking clarification on the new requirements and terminology. Quarterly reporting is one area that continues to cause confusion.
Quarterly updates are not:
- Intended to replace Self Assessment
- Taxpayers will still need to complete year-end processes to finalise their tax position.
- Tax payments
- Submitting a quarterly update does not mean paying tax every three months; and
- The updates are designed to keep HMRC informed throughout the year rather than collect tax on a quarterly basis.
What happens if you miss the deadline?
Although the introduction of MTD includes a transitional approach to penalties, businesses should not assume that quarterly deadlines can be ignored.
Missing early deadlines could lead to reporting backlogs later in the tax year, making future submissions more time-consuming and increasing the risk of inaccuracies.
Keeping up with reporting obligations from the outset will help ensure accurate information is available when year-end submissions are due.
How M+A Partners can help
Whether you are still unsure whether the rules apply to you, need help selecting compatible software or would like support with your ongoing quarterly reporting obligations, our team is here to help.
Visit our Making Tax Digital Hub for further resources on the new regime, including details of who is affected, key deadlines and practical guidance on meeting your obligations.
You can also listen to our MTD for Income Tax podcast on our Resources page for additional insights into what the changes mean for businesses and landlords.
