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Compliance

Mastering “Making Tax Digital” Quarterly Updates: What Sole Traders & Landlords Must Know

With the first Making Tax Digital for Income Tax (MTD-IT) quarterly update deadline approaching fast, sole traders and landlords need to act now to avoid penalties and streamline their accounting.

By Nomadic Tax Institute research team · 5-8 min read · Created

Introduction

From 6 April 2026, HMRC’s Making Tax Digital for Income Tax (MTD-IT) reforms require sole traders and landlords with qualifying income over £50,000 to maintain digital records and send quarterly updates of income and expenses. (gov.uk) The first quarterly update deadline is 7 August 2026 for the period covering the first three months of the tax year. (gov.uk)

Who’s in Scope?

  • Individuals who are sole traders or landlords with self-employment or property income.
  • Qualifying income exceeds £50,000 before allowances or expenses. (gov.uk)
  • From April 2027, threshold drops to £30,000, and in April 2028 further to £20,000. (gov.uk)

Key Obligations & Steps

  1. Set up compatible software: Record-keeping must be digital throughout the year, including corrections for errors made earlier. (gov.uk)
  2. Send quarterly updates: The first covers 6 April to 5 July 2026, deadline 7 August. (gov.uk)
  3. Submit annual Self Assessment return as usual: The year-end return must still be submitted, with HMRC using digital records and quarterly updates to support calculations. (gov.uk)
  4. Check for exemptions: Those who are digitally excluded can apply for exemption; also some circumstances may qualify for relief. (gov.uk)

Examples

  • Example 1: Anna, a sole trader with self-employment income £60,000 and property income £10,000, must start quarterly updates from 6 April 2026.
  • Example 2: Ben, a landlord with income £25,000 in 2026-27, will come into scope from April 2027 when the threshold falls to £30,000. Ben should assess this in advance. \

Practical Tips to Prepare

  • Pick your accounting software early; test that it’s compatible with HMRC’s system.
  • Monitor income closely to anticipate when you will cross thresholds in future years.
  • Organize expenses and receipts from the start: keep digital records continuously, not just at year-end.

Consequences of Non-Compliance

Failing to submit quarterly updates risks penalties. Errors may increase, and retro-active corrections are harder. Plus, when HMRC audits, outdated or paper-only records are problematic.

Conclusion

This is a major change for many self-employed people and landlords. With the first deadline on 7 August 2026, start planning now: get digital, get organised, and make sure you’re ahead of the curve.

Sources

Existing article citations

Structured source metadata was not recorded for this historic item. Links below were cited in the article body.

making-tax-digital-for-income-tax (www.gov.uk)

deadline-approaches-for-first-making-tax-digital-quarterly-upda… (www.gov.uk)

find-out-if-and-when-you-need-to-use-making-tax-digital-for-inc… (www.gov.uk)

updates (www.gov.uk)