MTD for Income Tax, quarter by quarter
For the first group of sole traders and landlords, the annual tax return has become five submissions a year. The good news is that four of them are summaries your software already holds, if the bookkeeping is kept up.
Who is in, and when
Making Tax Digital for Income Tax applies to sole traders and landlords based on their combined gross income from self-employment and property, before expenses. Those over £50,000 in 2024/25 joined on 6 April 2026. Those over £30,000 join in April 2027, and those over £20,000 in April 2028. Income from employment, dividends and pensions does not count towards the test. Limited companies are not affected; their turn is expected later.
The four quarterly deadlines
Updates follow the tax year's quarters and are due by the 7th of the month after each one ends:
- 6 April to 5 July: due 7 August
- 6 July to 5 October: due 7 November
- 6 October to 5 January: due 7 February
- 6 January to 5 April: due 7 May
You can elect to use calendar quarters instead (to 30 June, 30 September and so on), which many people find easier to reconcile; the deadlines stay the same.
What an update actually contains
Less than people fear. Each update sends HMRC the running totals of income and expenses for each business or property source, straight from your software. There is no tax calculation, no claims for allowances and no adjustments; if a figure was wrong last quarter, the next update simply corrects the cumulative total. It is a progress report, not a mini tax return.
The final declaration
After the year ends, the accounting adjustments, allowances, other income and reliefs are added and a final declaration is submitted by 31 January, the same date as the old return. The tax is paid on the same dates as before. In substance the annual exercise still exists; it has simply been spread out and moved into software.
Penalties: points, not fines, at first
Late quarterly updates earn a penalty point each. Reach four points and a £200 penalty follows, with another for each further late submission until a clean run resets the count. Late payment penalties work separately and bite from 15 days overdue. The system is designed to tolerate one slip and punish a habit.
Making it routine
Businesses finding MTD hard are almost always finding bookkeeping hard. If every transaction is in Xero, QuickBooks or Sage each month, with the bank reconciled, each quarterly update is a review and a button press. That is how we run it for clients: the records are kept current, the update is checked against the bank, and the deadline passes without anyone noticing it.
This note is general guidance and the MTD timetable has moved before; check your own position. If you are in MTD now, or will be from April 2027, we can keep the records and make the submissions. Talk to us.
Published 7 October 2026.