Your First MTD Quarterly Update: What to Submit by 5 August

Making Tax Digital has been coming for years. It was delayed, postponed, rescheduled, and delayed again. But as of 6 April 2026, it is real. If your gross property income (or combined property and self-employment income) exceeds £50,000, you are in the first wave. Your first quarterly update is due on 5 August.

That might feel like a long way off. It is not. You need to be recording transactions now, from 6 April onwards, in a way that HMRC will accept. Here is what that looks like in practice.

Who is affected right now?

MTD for Income Tax Self Assessment (MTD ITSA) applies from 6 April 2026 to individuals and landlords with gross income over £50,000 from:

• Property rental income
• Self-employment income
• A combination of both

If your total from these sources crosses £50,000, you are in scope now. If it is between £30,000 and £50,000, you join from April 2027. Below £30,000, you are currently exempt (though this threshold may extend to £20,000 from April 2028).

Partnerships, companies, and trusts are not yet included. This is personal income only.

What is a quarterly update?

Under MTD, instead of filing one Self Assessment tax return at the end of the year, you submit summary data to HMRC four times a year. Each quarterly update covers a three-month period:

• Q1: 6 April to 5 July. Due by 5 August 2026
• Q2: 6 July to 5 October. Due by 5 November 2026
• Q3: 6 October to 5 January. Due by 5 February 2027
• Q4: 6 January to 5 April. Due by 5 May 2027

After all four quarterly updates, you submit a final declaration by 31 January 2028 (for the 2026/27 tax year). The final declaration replaces the traditional Self Assessment tax return.

A quarterly update is not a tax calculation. It is a summary of income received and expenses paid during that quarter. HMRC uses this data to build a running picture of your tax position, and you can see an estimated tax liability throughout the year rather than getting a surprise in January.

What goes in the Q1 update?

Your first quarterly update covers 6 April to 5 July 2026. You need to report:

Income

• All rental income received (not invoiced, received) during the quarter
• Any other property income: insurance payouts for rental properties, lease premiums, income from furnished holiday lets

Expenses

• Mortgage interest payments (the allowable portion under the finance cost restriction)
• Insurance premiums
• Repairs and maintenance
• Letting agent fees
• Legal and professional fees (related to the property business)
• Ground rent and service charges (if applicable)
• Utility bills (if you pay them)
• Travel costs for property management (at 45p per mile or actual cost)
• Accountancy fees
• Other allowable expenses

You do not need to submit individual receipts or invoices. The quarterly update is a summary: total income and total expenses, broken down into HMRC's standard categories. But you must keep the underlying digital records that support these figures. HMRC can request them at any time.

What counts as "digital records"?

HMRC requires that your records are maintained digitally in MTD-compatible software. This means:

• The date of each transaction
• The amount
• A brief description or category

You cannot keep a paper ledger and type the totals into software at the end of the quarter. The records themselves must be digital from the point of entry. Spreadsheets count, but only if they feed into MTD-compatible software that can submit to HMRC via their API.

Free MTD software for landlords exists, including LandlordOS, which is built specifically for property income and connects directly to HMRC.

Track your rental income and expenses for MTD, free

LandlordOS records transactions, categorises them for HMRC, and submits quarterly updates directly. No accountant needed for straightforward portfolios.

Start free

Common mistakes to avoid

1. Recording income when invoiced, not when received

MTD uses the cash basis by default for property income under £150,000. That means you record rent when it hits your bank account, not when it is due. If a tenant pays April's rent on 28 March, that is in the previous tax year. If they pay it on 8 April, it is in Q1.

2. Forgetting to record expenses as they happen

The biggest practical challenge is not the submission itself. It is building the habit of recording expenses as they occur. A plumber's invoice in May, a new boiler thermostat from Amazon, a mileage claim for a property visit. If you do not record these as they happen, you will be scrambling in late July trying to reconstruct three months of spending.

3. Using non-compatible software

Your software must be on HMRC's recognised list and able to submit via their MTD API. A basic spreadsheet on its own is not enough. Check that your chosen tool is listed on HMRC's software page, or use one that is specifically built for MTD like LandlordOS.

4. Missing the deadline

HMRC has said that penalties for late submission in the first year will be "light touch" while people adjust. But "light touch" is not "no touch". Points-based penalties apply: each late submission earns a point, and when you hit the threshold (currently four points for quarterly obligations), you receive a £200 penalty. Each subsequent late submission attracts another £200. Start as you mean to go on.

5. Confusing quarterly updates with tax payments

A quarterly update is not a tax payment. You are not paying tax four times a year (unless you are already making payments on account, which is a separate system). The quarterly update is purely informational: here is what I earned and spent. Tax payments continue on the existing schedule (31 January and 31 July).

What to do right now

1. Check if you are in scope. Gross property and self-employment income over £50,000? You are in the first wave. Over £30,000? You start April 2027, but getting set up early is sensible.
2. Choose your software. If you do not already have MTD-compatible software, set it up now. Not in July. Now. You need to be recording from 6 April onwards.
3. Connect to HMRC. Most MTD software requires you to authorise the connection to your HMRC account. This takes a few minutes. Do it now so there are no surprises in August.
4. Record every transaction. Rent received, expenses paid, from 6 April forward. If you have already missed a few weeks, go back through your bank statements and add them. The data needs to be there before the submission.
5. Set a calendar reminder for late July. Give yourself a week before the 5 August deadline to review your Q1 data, check for anything missing, and submit.

The bigger picture

MTD is not going away. The threshold will drop to £30,000 next year and likely £20,000 the year after. Within three years, most landlords with a meaningful portfolio will be submitting quarterly updates. The landlords who start now, even if they are technically below the threshold, will have clean records, established workflows, and no panic when their turn comes.

The first quarterly update is always the hardest. Not because the submission is complex (it is straightforward once your records are in order), but because it requires a change in habit. Recording as you go rather than dumping everything on your accountant in January. Once that habit is established, the rest is routine.

You have until 5 August. Start recording now.