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 NomadicTax Research Team • 5-8 min read • July 30, 2026
## 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](https://www.gov.uk/government/collections/making-tax-digital-for-income-tax?utm_source=openai)) The first quarterly update deadline is **7 August 2026** for the period covering the first three months of the tax year. ([gov.uk](https://www.gov.uk/government/news/deadline-approaches-for-first-making-tax-digital-quarterly-update?utm_source=openai))
## 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](https://www.gov.uk/guidance/find-out-if-and-when-you-need-to-use-making-tax-digital-for-income-tax?utm_source=openai))
- From April 2027, threshold drops to **£30,000**, and in April 2028 further to **£20,000**. ([gov.uk](https://www.gov.uk/guidance/find-out-if-and-when-you-need-to-use-making-tax-digital-for-income-tax?utm_source=openai))
## Key Obligations & Steps
1. **Set up compatible software**: Record-keeping must be digital throughout the year, including corrections for errors made earlier. ([gov.uk](https://www.gov.uk/guidance/use-making-tax-digital-for-income-tax/updates?utm_source=openai))
2. **Send quarterly updates**: The first covers 6 April to 5 July 2026, deadline 7 August. ([gov.uk](https://www.gov.uk/government/news/deadline-approaches-for-first-making-tax-digital-quarterly-update?utm_source=openai))
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](https://www.gov.uk/guidance/use-making-tax-digital-for-income-tax/updates?utm_source=openai))
4. **Check for exemptions**: Those who are digitally excluded can apply for exemption; also some circumstances may qualify for relief. ([gov.uk](https://www.gov.uk/guidance/find-out-if-and-when-you-need-to-use-making-tax-digital-for-income-tax?utm_source=openai))
## 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.