Compliance

How to Navigate the First Quarter Update Under MTD for Income Tax

Understanding the new deadlines and formats for the quarterly update under Making Tax Digital for Income Tax (MTD IT) is essential for sole traders and landlords with income over £50,000.

By NomadicTax Research Team • 5-8 min read • July 27, 2026

## What’s New with MTD for Income Tax From **6 April 2026**, HM Revenue & Customs (HMRC) made Making Tax Digital for Income Tax mandatory for **sole traders and landlords** whose self-employment and/or property income exceeds **£50,000** before expenses. ([gov.uk](https://www.gov.uk/government/news/deadline-approaches-for-first-making-tax-digital-quarterly-update?utm_source=openai)) ## First Quarterly Update Deadline - The first reporting period covered is from **6 April 2026 to 5 July 2026**, with data due by **7 August 2026** using recognised software. ([gov.uk](https://www.gov.uk/government/news/deadline-approaches-for-first-making-tax-digital-quarterly-update?utm_source=openai)) - While this does *not* replace the Self Assessment tax return (still due 31 January), it’s a critical new component of compliance under the MTD regime. ([gov.uk](https://www.gov.uk/government/news/deadline-approaches-for-first-making-tax-digital-quarterly-update?utm_source=openai)) ## Penalties and Grace Periods - No penalty points will be issued for missed quarterly updates **during the first year** of MTD IT. ([gov.uk](https://www.gov.uk/government/news/deadline-approaches-for-first-making-tax-digital-quarterly-update?utm_source=openai)) - From the second year onward, penalty points will apply for missed deadlines—**four points** will trigger a **£200 fixed penalty**. Points expire over time. ([gov.uk](https://www.gov.uk/government/news/deadline-approaches-for-first-making-tax-digital-quarterly-update?utm_source=openai)) ## Actionable Steps for Those Affected 1. **Check your gross self-employed and property income**—if it’s over £50,000, you’re in scope. 2. **Choose HMRC-recognised accounting software** for digital records and quarterly updates. 3. **Determine your update period**: most will use the tax year quarter (e.g., Apr–Jun), but aligning to calendar quarters is possible for some. ([gov.uk](https://www.gov.uk/government/news/deadline-approaches-for-first-making-tax-digital-quarterly-update?utm_source=openai)) 4. **Submit your first quarterly update by 7 August 2026** to cover Apr–Jul activities. 5. **Start preparing for full adoption**—keep accurate digital records and anticipate using software for your end-of-year Self Assessment return. ## Example to Illustrate Jane is a landlord earning £60,000 from property and runs a small freelance design service earning £5,000. She is now in scope of MTD IT. She must: - Keep digital records using compatible accounting software from April 2026. - Submit a quarterly update for the period 6 April to 5 July by 7 August. - Continue to file her Self Assessment return by 31 January, but that will also need to be submitted using compatible software. By understanding and meeting these deadlines and system requirements, sole traders and landlords can avoid penalties and streamline their tax compliance under MTD IT. **Quick Checklist:** - ✅ Check income threshold > £50,000 - ✅ Register for MTD 't and select software - ✅ Start logging income and expenses digitally from April - ✅ Submit first quarterly update by early August - ✅ Keep an eye on further expansion of scope (e.g., £30,000 from April 2027) With the first deadline looming on 7 August 2026, it’s best to act now.