MTD Quarterly Reporting: What Sole Traders Need to Know
Landlords and sole traders earning a qualifying income of more than £50,000 will need to file their first quarterly tax return in line with Making Tax Digital (MTD) on 7 August 2026.
These so-called ‘quarterly updates’ are not a full tax return; rather they are a summary of your self-employment or property income and expenses that must be submitted via MTD-compatible software. Here’s a brief guide covering everything you need to know.
What do I need for MTD quarterly reporting?
If you are a qualifying sole trader or landlord, you should by now have MTD-compatible accounting software that you use to keep digital records of your financial transactions. Every three months, this software can pull together the digital records for each business or property income source and create totals for the relevant income and expense categories. These totals must then be sent to HMRC, which has quarterly update guidance to explain how this works.
You do not need to send HMRC every invoice, receipt or bank transaction for these updates – only the totals for the relevant categories. A full tax return is only required at the end of the year, but quarterly reporting means that bookkeeping must be kept up to date throughout the year.
Who needs to use MTD for Income Tax?
MTD for Income Tax currently applies to those who:
- Are registered for Self Assessment
- Receive income from self-employment, property or both
- Have a qualifying income of more than £50,000
Qualifying income refers to your total income from self-employment and property before expenses. HMRC calls this gross income or turnover. If you have more than one source of self-employment or property income, those sources are added together.
What do quarterly updates include?
MTD quarterly updates need to include:
- Totals from your digital records for self-employment and property income and expenses
- Records already created since the start of the tax year
- Any corrections made to previous updates for that tax year
Accounting or tax adjustments do not need to be made before sending a quarterly update. These will take place later, before you finalise your Income Tax position and submit your tax return. HMRC’s quarterly update guidance gives more detail on what is sent.
What are the MTD quarterly reporting deadlines?
For standard update periods, the deadlines are:
6 April – 5 July: 7 August
6 July – 5 October: 7 November
6 October – 5 January: 7 February
6 January – 5 April: 7 May
It’s important to note that MTD quarterly reporting does not replace your tax return. After your final quarterly update, you still need to complete and file your year-end tax return, including any necessary adjustments such as claiming allowances and reliefs.
What happens if you miss an MTD quarterly reporting deadline?
While there are no penalties for late quarterly updates in the 2026/27 tax year, penalties will still apply for late tax returns or late payment of tax, and quarterly updates are part of the process needed before you can submit your final return.
Help with MTD quarterly reporting
If you need help with your MTD quarterly reporting or would like to learn more about how the MTD rollout will affect you, contact a reputable accountant today.
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