Making Tax Digital Quarterly Reporting

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Making Tax Digital (MTD) for Income Tax is now becoming a major change for self-employed people and landlords in the UK. From 6 April 2026, many sole traders and landlords with qualifying income above £50,000 have had to keep digital records and send quarterly updates to HMRC using compatible software. The rules will then gradually extend to more people as the qualifying income threshold falls.

For someone who has always completed one Self Assessment tax return at the end of the year, quarterly reporting can initially seem complicated, but the basic idea is quite straightforward: instead of keeping your records throughout the year and only reporting your business income and expenses to HMRC once a year, you will send HMRC a summary of your income and expenses four times a year.

What is Making Tax Digital for Income Tax?

Making Tax Digital for Income Tax is HMRC’s system for moving Income Tax reporting away from traditional paper or basic online tax-return processes towards digital record keeping and software-based reporting.

If you are within MTD for Income Tax, you will generally need to use compatible software to keep digital records of your business income and expenses, send quarterly updates to HMRC and then complete a final tax return after the end of the tax year.

It is important to understand that Making Tax Digital quarterly reporting does not mean paying your Income Tax four times a year. The quarterly update is primarily a report of your business income and expenses. Your actual Income Tax and National Insurance liability is still dealt with through the tax return and the normal tax payment deadlines.

If you are unsure whether the new rules apply to you, our guide Do I need to do MTD if I earn under £50k? explains how the qualifying-income threshold works and why your turnover is not necessarily the same thing as your qualifying income.

Who needs to use MTD for Income Tax?

From 6 April 2026, MTD for Income Tax became mandatory for sole traders and landlords with qualifying income of more than £50,000 based on the relevant previous tax year. The threshold then falls to more than £30,000 from 6 April 2027 and more than £20,000 from 6 April 2028.

The important point is that HMRC looks at qualifying income, which is broadly the total gross income from self-employment and property before deducting expenses, rather than simply looking at your taxable profit.

For example, if you are a sole trader with £55,000 of business turnover and £20,000 of allowable expenses, your taxable profit may only be £35,000, but your qualifying income can still be above £50,000, meaning you may be required to use MTD.

If you have both self-employed income and rental income, the position can also be different from someone who only has one source of income, so it is worth checking your circumstances rather than assuming that MTD does or does not apply based on your profit alone.

What are the Making Tax Digital quarterly reporting dates?

For most businesses using the standard tax-year reporting periods, there are four quarterly updates each year. The periods and deadlines are:

Quarterly update	Period covered	Deadline
Quarter 1	6 April to 5 July	7 August
Quarter 2	6 April to 5 October	7 November
Quarter 3	6 April to 5 January	7 February
Quarter 4	6 April to 5 April	7 May

These dates can look slightly unusual because the quarterly updates are cumulative. For example, the second update does not simply cover July to October. It contains information from the beginning of the tax year through to 5 October.

For the 2026/27 tax year, this means the first deadline was 7 August 2026, followed by 7 November 2026, 7 February 2027 and 7 May 2027.

Why are the MTD quarterly updates cumulative?

The cumulative approach means that each update gives HMRC information about your income and expenses from the beginning of the tax year up to the relevant quarter-end date.

For example, your first update might contain your figures from 6 April to 5 July. Your second update will then contain figures from 6 April to 5 October, rather than only the three months since the first update.

This is useful because if you discover that something was recorded incorrectly, you can correct your digital records rather than having to submit completely separate historical information every time.

What information do I have to report each quarter?

The quarterly update is essentially a summary of your business income and expenses rather than a full Self Assessment tax return.

For a sole trader, the information can include business turnover, other business income and different categories of allowable business expenses. The exact information required depends on the type of income and activity you have.

This means that keeping your bookkeeping up to date becomes much more important. If your records are incomplete or expenses are put into the wrong categories, the quarterly figures sent to HMRC may also be wrong.

This is one reason why MTD is not simply a case of pressing a button four times a year. The quality of the digital records behind the submission is just as important as the submission itself.

Do I have to submit four separate tax returns every year?

No. The quarterly updates are not four Self Assessment tax returns.

You will send four quarterly updates during the tax year, but after the end of the tax year you will still need to complete the final tax return process, including any necessary adjustments, reliefs, allowances and other income or gains.

The final tax return is also where your overall tax position is established. The normal deadline for submitting the tax return and paying tax remains 31 January following the end of the tax year.

So, MTD does not simply replace your annual tax obligations with four smaller tax returns. Instead, it introduces regular digital reporting during the year and then a final end-of-year process.

When did the first MTD quarterly update have to be submitted?

For people required to use MTD from April 2026 and following the standard tax-year reporting periods, the first period ran from 6 April 2026 to 5 July 2026, with the first quarterly update due by 7 August 2026.

The second update is due by 7 November 2026, the third by 7 February 2027 and the fourth by 7 May 2027.

HMRC confirmed in August 2026 that there were no penalty points for late quarterly updates during the 2026/27 tax year, although taxpayers still need to submit the updates and normal penalties can still apply to late tax returns and late tax payments.

Can I choose different quarterly reporting periods?

Yes, there is an option to use calendar-based quarterly periods in certain circumstances.

Instead of the standard periods based around the tax year, calendar quarters can run from 1 April to 30 June, 1 April to 30 September, 1 April to 31 December and 1 April to 31 March, with the same reporting deadlines of 7 August, 7 November, 7 February and 7 May.

This can be particularly useful where your accounting period ends on 31 March because it can make your bookkeeping and reporting periods easier to manage.

However, the choice needs to be considered carefully because once you have sent your first quarterly update for the tax year, you cannot simply change the update periods for that tax year.

Do I need special software for MTD quarterly reporting?

Yes. If you are required to use MTD for Income Tax, you need compatible software that can maintain your digital records and communicate with HMRC.

HMRC does not provide its own bookkeeping software for MTD for Income Tax. Instead, you need to use software that is compatible with the MTD service.

This does not necessarily mean that you need an expensive accounting package. Different software providers offer different levels of functionality and pricing, so the right choice will depend on the size and complexity of your business.

You can also read our guide on What is MTD ITSA software? if you want to understand what the software actually does and why it is needed.

Can my accountant submit my quarterly updates for me?

Yes, an accountant or other authorised tax agent can deal with MTD for Income Tax on your behalf.

However, having an accountant submit the quarterly update does not remove the need for accurate records. Your accountant needs the relevant income and expense information from you, or access to an appropriate bookkeeping system, before the figures can be checked and submitted.

For many self-employed people, this is where an accountant can add more value than simply completing the annual tax return. Instead of dealing with four deadlines yourself, you can have someone responsible for keeping the reporting process organised throughout the year.

You can read more about this in our guide Can my accountant do MTD for me?.

What happens if I miss an MTD quarterly reporting deadline?

The penalty system is changing as MTD becomes established.

For the 2026/27 tax year, HMRC has confirmed that there are no penalty points for missing quarterly update deadlines, although the updates still need to be submitted. From the following tax year, points-based penalties apply to missed quarterly update deadlines.

For tax years after 2026/27, missing a relevant quarterly update can result in a penalty point. Once four points have been accumulated, a £200 penalty is charged, with further penalties possible if additional deadlines are missed.

This makes it sensible to treat each quarterly deadline as a real accounting deadline even during the first year when penalty points are not being issued.

Does MTD quarterly reporting mean I pay tax every quarter?

No, and this is one of the most common misunderstandings about MTD.

The quarterly update tells HMRC about your income and expenses, but it does not mean that you must calculate and pay your final Income Tax bill every three months.

You will still have the normal tax payment arrangements, including the Self Assessment deadline of 31 January and, where applicable, payments on account. The quarterly updates are designed to give HMRC more regular information and allow taxpayers to see a better picture of their likely tax position during the year.

What should self-employed people do now?

If you are already within MTD for Income Tax, the most important thing is to make sure your bookkeeping is up to date, your software is compatible with MTD and you know when your next quarterly update is due.

If you are not required to join until a later year, it is still worth preparing early rather than waiting until the month before your first deadline. Moving from spreadsheets, paper receipts or records kept in different places to properly organised digital records can take more time than expected.

For a self-employed person, the simplest approach is usually to record income and expenses throughout the year, keep supporting receipts and invoices, reconcile the records regularly and make sure the information is accurate before each quarterly submission.

MTD quarterly reporting dates at a glance

For the standard reporting periods, the key dates are:

• 7 August – first quarterly update
• 7 November – second quarterly update
• 7 February – third quarterly update
• 7 May – fourth quarterly update
• 31 January – final tax return and payment deadline following the tax year

The important thing to remember is that MTD quarterly reporting is about keeping and reporting your records digitally throughout the year, not paying your tax four times a year. For self-employed people who already maintain good bookkeeping records, the change should be manageable, but those who have traditionally left their bookkeeping until January may find MTD requires a much more regular approach.

Information checked against HMRC guidance available in September 2026. MTD rules and deadlines can change, so specific circumstances should always be checked against the latest HMRC guidance.

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