Making Tax Digital for Income Tax: Getting Ready for Your First August Quarterly Update
If your total gross income from self-employment and property exceeded £50,000 in 2024/25, you must normally use Making Tax Digital for Income Tax from 6 April 2026. Your first quarterly update is due by 7 August 2026, so compatible software and digital records should already be in place.
Qualifying income means turnover before expenses. HMRC combines relevant self-employment and property income when assessing the threshold. For UK residents, this can include UK and overseas property income.
What MTD for Income Tax requires
You or your agent must use compatible software to keep digital records, send quarterly updates and submit an annual tax return. For one income source, that means 4 quarterly updates followed by an MTD tax return. More businesses can mean more updates.
A quarterly update is not a completed tax return and does not require year-end adjustments. It reports category totals for income and expenses recorded so far. Under standard periods, each update is cumulative rather than covering only the latest 3 months.
Key dates for 2026/27
| Update | Standard cumulative period | Deadline |
|---|---|---|
| First update | 6 April to 5 July 2026 | 7 August 2026 |
| Second update | 6 April to 5 October 2026 | 7 November 2026 |
| Third update | 6 April 2026 to 5 January 2027 | 7 February 2027 |
| Fourth update | 6 April 2026 to 5 April 2027 | 7 May 2027 |
| MTD tax return | Full 2026/27 tax year | 31 January 2028 |
You may choose calendar update periods running cumulatively from 1 April to 30 June, 30 September, 31 December and 31 March. The deadlines are unchanged. Select this option before sending your first update because you cannot switch periods during that tax year afterwards.
Mistakes to avoid before 7 August
A spreadsheet can form part of an MTD system, but it must connect digitally to compatible submission software. Manually copying totals between programs does not create the required digital link.
Need Expert Accounting Advice?
If you are unsure about tax, bookkeeping, payroll, property accounts or business finances, speak to the team at FHP Accounting for clear, practical guidance.
Quarterly updates do not create quarterly tax payments. Normal payment dates continue, including 31 January and, where payments on account apply, 31 July.
Separate sole-trader businesses require separate digital records and updates. UK rental properties are generally treated as one UK property business, including your share of jointly let UK properties. Someone with one trade and one UK property business will therefore normally send 8 quarterly updates during the year, followed by one tax return.
For more detail, read Making Tax Digital and quarterly update returns and Making Tax Digital for jointly owned property.
Penalties during the first year
HMRC will not apply penalty points for late quarterly updates for 2026/27. However, you must still keep digital records and send all required updates before submitting your tax return. The concession does not cover a late annual return or late tax payment.
What landlords should review
Landlords can enter MTD sooner than expected because the threshold uses gross income before expenses and combines it with relevant self-employment income. A landlord accountant can check whether you are in scope and organise your property records.
A property tax accountant can help with complex ownership or tax treatment, while a commercial property accountant can support landlords with commercial units.
Outsourced Xero bookkeeping services can help establish compliant records. Related guidance covers migrating from spreadsheets to Xero, rental income bookkeeping systems for property management and tax planning for property investors.
Frequently asked questions
Do I still submit an annual tax return?
Yes. For 2026/27, you submit it through MTD-compatible software by 31 January 2028. You do not file a second return through the usual HMRC online service.
What if my income falls below the threshold?
A fall during the year does not normally remove you immediately. Once qualifying income remains below the relevant threshold for 3 consecutive tax years, you can choose to opt out. Different rules apply if all qualifying income sources cease.
Get your records ready
Get in touch with our team or book a free consultation to confirm whether MTD applies and prepare your records before the first deadline.
I lead FHP Accounting, an accountancy practice specialising in Commercial and Residential Property Accounting. Our goal is to make the administration of running property portfolios easier for landlords, managers, and investors — allowing you to focus on what you do best, while we take care of everything behind the scenes.
Need Expert Accounting Advice?
If you are unsure about tax, bookkeeping, payroll, property accounts or business finances, speak to the team at FHP Accounting for clear, practical guidance.
