If you’re a sole trader or landlord with qualifying income of more than £50,000, your first Making Tax Digital quarterly update is due by 7 August 2026. That gives a couple of months to have your software set up, your records up to date, and the figures ready to send.
This isn’t a tax return. It’s a cumulative summary of your income and expenses since the start of the tax year, sent to HMRC through compatible software.
The actual tax bill still gets calculated at year-end. But it’s your first encounter with the new MTD rhythm, and getting comfortable with the mechanics now matters more than the precise numbers – the soft landing on penalty points runs out at the end of the 2026/27 tax year.
This guide covers who’s in scope, what to submit, the dates, and the practical steps worth taking before 7 August.
Who’s in Scope for August 2026
You’re required to be in MTD for Income Tax from 6 April 2026 if your qualifying income for 2024/25 was more than £50,000. HMRC works this out from your filed 2024/25 Self Assessment return, although the legal duty to check sits with you.
Qualifying income covers:
- Self-employment turnover: Gross trading income, not profit.
- Property income: Gross rents from UK property and, for UK residents, overseas property declared on your UK return. Non-residents’ foreign property income that isn’t on the UK return doesn’t count.
- Combined totals: If you have both, the £50,000 figure is the combined gross.
A few points worth knowing if you’re on the edge:
- HMRC writes to people it thinks are in scope. It’s not automatic enrolment, and the legal duty to check sits with you. The deadline applies whether the letter arrives or not.
- At or below £50,000? You’re not in scope yet. The threshold drops to more than £30,000 from April 2027 (based on 2025/26 income) and more than £20,000 from April 2028 (based on 2026/27 income).
- Voluntary sign-up. Businesses below £50,000 can volunteer to enter MTD ITSA early. Penalty points don’t apply to late quarterly updates while volunteering, although the points regime for late year-end tax returns does still apply.
If you’re unsure whether you’re in scope, HMRC’s MTD for Income Tax tool walks you through it.
What a Quarterly Update Is
A quarterly update is a cumulative summary of your income and expenses for the tax year so far, submitted electronically through MTD-compatible software. It is not:
- A tax return
- A tax bill
- Anything that triggers a payment to HMRC
- A final position – corrections can be picked up in later cumulative updates or before finalising the year-end tax return
The point is to give HMRC a running view of how your business and property income is shaping up across the year. Each update covers the cumulative figures since 6 April, not just the most recent three months.
You’ll submit one update for each income source. A sole trader who also rents out property will submit two updates each quarter – one for the self-employment, one for the property business (HMRC generally treats all UK properties as a single UK property business).
The First Quarter: Dates and Options
HMRC offers two ways to set your update periods, and quarterly updates are cumulative from the start of the tax year:
Standard update periods (default):
- Q1 covers 6 April to 5 July 2026, deadline 7 August 2026
- Q2 covers 6 April to 5 October 2026, deadline 7 November 2026
- Q3 covers 6 April to 5 January 2027, deadline 7 February 2027
- Q4 covers 6 April 2026 to 5 April 2027, deadline 7 May 2027
Calendar update periods (selection in your software):
- Q1 covers 1 April to 30 June 2026, deadline 7 August 2026
- Q2 covers 1 April to 30 September 2026, deadline 7 November 2026
- Q3 covers 1 April to 31 December 2026, deadline 7 February 2027
- Q4 covers 1 April 2026 to 31 March 2027, deadline 7 May 2027
The calendar option is useful if you’re already on calendar VAT quarters or want your MTD ITSA periods to line up with calendar months. The choice is made for each income source in your software before sending the first quarterly update – you can’t change periods for that tax year once an update has been sent.
Either way, the first deadline is 7 August.
Information You Need To Input
The exact categories depend on your software, but for self-employment HMRC’s standard breakdown covers:
- Income: Total turnover for the period.
- Cost of goods sold: Stock and direct costs.
- Other allowable expenses: Travel, motor, premises, repairs, professional fees, advertising, staff costs, depreciation, bad debts, interest, and miscellaneous.
For property income, the categories are simpler:
- Total rents received
- Allowable property expenses by category (repairs, agent fees, insurance, services, ground rent and so on)
- Loan interest and finance costs reported separately, since these are restricted to a 20% tax credit rather than a straight deduction
Businesses with qualifying income below the VAT threshold of £90,000 can use simpler record categorisation under HMRC’s rules, although the exact way this flows through to a quarterly update depends on the software. Check what your software supports before you submit.
You send cumulative totals, not transactions. The software pulls the figures from your underlying records and packages them for HMRC.
Software and Sign-Up
MTD ITSA submissions can’t be made through HMRC’s existing online portal. You need compatible software from HMRC’s approved list.
Three things to settle before 7 August:
- HMRC sign-up: You need to be enrolled in MTD for Income Tax through HMRC. This isn’t automatic. Sign up through your Government Gateway account – it takes a few minutes but can’t be left until the last week.
- Software choice: Some free and low-cost options may be available; check HMRC’s software finder and each provider’s current pricing. Some bookkeeping platforms bundle MTD ITSA into wider packages that include bank feeds, invoicing and receipt capture, which may suit anyone already running VAT through them.
- Bank feed setup: Connecting the software to your business bank account dramatically reduces the manual work. Bank-feed authorisation can take time, so set it up well before the deadline.
If you’re using an agent or accountant to file on your behalf, they’ll need to be authorised through the new MTD agent services account, which is separate from the older Government Gateway agent account.
The Soft Landing and What It Doesn’t Cover
HMRC has confirmed a soft landing on the new MTD ITSA penalty regime for 2026/27. In practical terms:
- No penalty points for late quarterly updates during the first tax year
- Existing late filing and payment penalties still apply to the year-end tax return submitted through compatible software and to any tax owed
- Late payment interest still runs at the standard HMRC rate (currently 7.75%, check before relying on the figure) on anything unpaid after the due date
So the cost of getting a quarterly update wrong in 2026/27 is relatively forgiving. The cost of getting the year-end tax return wrong in January 2028 is not. Treat the first year as a chance to settle into the rhythm without panic, but don’t extend that to the year-end return.
What to Do Before 7 August
A short list of things worth ticking off this month and next:
- Confirm you’re in scope by checking your 2024/25 qualifying income figure.
- Sign up for MTD for Income Tax with HMRC if you haven’t already.
- Choose software and authorise your accountant if you have one.
- Connect bank feeds and import any historic data you’ll need.
- Categorise your transactions from 6 April onwards so the first quarter’s figures are clean.
- Pick standard or calendar update periods in your software before the first submission, and stick with it for the year.
The biggest source of August panic for early MTD users isn’t the submission itself – it’s discovering in late July that the software isn’t set up, bank feeds aren’t authorised, or three months of transactions need categorising from scratch.
How Double Point Can Help
Most of MTD for Income Tax is software-driven – pick the right system, set it up properly, and the quarterly cycle becomes a few minutes of review per quarter. The setup is where most of the work and most of the mistakes sit.
At Double Point, our chartered accountants are running MTD for Income Tax submissions for sole traders and landlords across the UK. We help with software selection, sign-up, bank feed configuration, transaction categorisation, and the actual quarterly submission itself.
Book a free consultation before the 7 August deadline and we’ll make sure your first update goes in cleanly.