If you’re a sole trader or landlord facing your Making Tax Digital (MTD) for Income Tax quarterly update, you might’ve figured out the basics: the first one is due by 7 August 2026, and you send it through your software.
But dig into the detail and MTD is full of quirks, easements and shortcuts that hardly anyone talks about—most of which make your life easier, not harder.
Here are 10 of the best—plus a few bonus entries that could save you headaches. At least one of them will save you time this quarter.
Here’s what we discuss:
1. You can file up to 10 days before the quarter ends
Here’s one almost nobody knows: HMRC lets you submit a quarterly update up to 10 days before the update period actually finishes—as long as you’re confident no more transactions will land in those final days.
Off on holiday? Wrapping up before a busy season? You could have filed your first update from 26 June and spent deadline week thinking about anything else. Worth remembering for the deadlines for quarters two, three and four.
2. Your digital records don’t have to be “live”
MTD requires you to keep your records digitally—but it doesn’t require you to keep them live in real time.
Sitting down before each quarterly deadline and entering everything in one batch is perfectly within the rules.
That said, little and often is the smarter habit.
Connect your bank feed, snap receipts as you go, and the quarterly update stops being a job at all—it can become a five-minute review.
But if life gets in the way one quarter, you’re not breaking any rules by catching up.
Bonus tip #1: There’s free MTD software (and that’s free, forever)
Sage Sole Trader lets you do everything you need to for MTD for Income Tax—and Sage Sole Trader Free is a permanently zero cost, Making Tax Digital (MTD)-ready accounting app designed for non-VAT registered sole traders.
It does everything you need. Yes, really.
Here’s all you need to do to submit a quarterly update, even if you’ve done absolutely nothing for MTD or your accounting to this point in the tax year:
- Download Sage Sole Trader. There’s mobile apps, as well as desktop.
- Create an account and sign-in.
- Connect your business bank account, and then import your transactions.
- Use the categorisation tool to categorise your transactions with just a swipe, if you’re using the app. The app will help auto-categorise, too!
- If you’ve bought anything with cash, or if you’ve taken any payments in cash, create manual transactions for these using the data from receipts you’ve received, or invoices you’ve created.
- Open your quarterly update, review it, and then tap to send it to HMRC.
That’s it. Job done. For free. Now you can get back to doing what you love most.
3. There are no late-filing penalties this first year
HMRC has confirmed a soft landing: no penalty points will be issued for late quarterly updates during the 2026/27 tax year for those mandated from April 2026.
Do not treat that as an invitation to skip updates! That would be bad.
They all still need to be submitted before you can finalise your year, and the points system starts properly from 2027/28.
But it does mean your first year is a genuine practice run.
4. There’s nothing to pay on 7 August
A quarterly update is a summary of your income and expenses.
It is not a tax bill, and it doesn’t change when you pay tax—your payment dates stay exactly where they’ve always been.
So, the deadline costs you a few minutes in your software, not a penny from your bank account. (Although if you’ve previously agreed with HMRC to pay on account by 31 July, that hasn’t changed.)
5. You can update your figures after you submit
Each update is cumulative: it covers everything from the start of the tax year up to the end of that quarter, not just the latest three months.
Spot a missed expense from May in September? It simply flows into your next update, and everything is finalised at year end.
Even better, penalties for mistakes like this don’t apply to quarterly updates. Ever.
The goal each quarter is complete and reasonable—not audit-perfect. Submit, move on, run your business.
(To be clear, HMRC requires you to take care to be as accurate and complete as possible in your updates. None of the above is a get-out-of-jail-free card. But it is good to know that accidental or unintentional errors can be fixed.)
6. Under £90,000? You only need two totals
If your turnover is below the £90,000 VAT registration threshold, you qualify for what’s known as “three-line accounts”.
Instead of splitting every expense into HMRC’s categories, your digital records only need to distinguish income from expenses—and your quarterly update reports just those two totals.
That could be a serious admin saving for smaller businesses and landlords.
Your software can still categorise everything behind the scenes if you want richer insight, and perhaps the key thing to remember is that you’ll still need to have those digital records of income and expenditure by the quarterly update deadline.
7. You can pick quarter dates that suit you
The standard update periods follow the tax year: 6 April to 5 July, and so on.
But if tidy month-ends suit your bookkeeping better, you can elect to use calendar quarters instead—1 April to 30 June for quarter one—with exactly the same deadlines.
One catch: you have to make the choice before you submit your first update for the tax year and let HMRC know. So if you’ve already filed, it’s one to remember for next April.
8. Each income source gets its own update—even a quiet one
If you’re both a sole trader and a landlord, you don’t send one combined update. You send one for each income source, each quarter. Good software makes this painless, but it’s worth knowing so a second deadline never catches you out.
Keep an eye on both sets of figures as the quarter closes, and let your software’s reminders do the remembering for you.
And yes, if you run two businesses and are a landlord, that’s three quarterly updates.
9. Joint landlords can leave expenses until year end
Own a rental property with someone else?
A dedicated easement lets you report just your share of the income each quarter and deal with expenses once, at the end of the year (subject to the relevant conditions being met). So, no splitting the boiler repair four times annually.
Combine it with three-line accounts (if your property income is under £90,000) and your entire quarterly obligation for a jointly owned property can shrink to a single income figure.
That’s about as light as tax admin gets.
10. Every update gives you a free tax estimate
Here’s the genuine upside nobody mentions: once you submit an update, you get back an in-year estimate of your tax position based on the figures so far.
For the first time, you’ll know roughly the shape January’s bill might take—but in August, with time to put money aside, smooth your cash flow, or talk to an accountant while there’s still a chance to act. (Although don’t forget that your final tax bill might take into account other sources of income like interest or pensions, plus reliefs or adjustments—and these can affect the final amount.)
The old system told you what you owed after the year was over. This one tells you while you can still do something about it. Used well, that estimate might be the most valuable thing MTD gives you.
Bonus tip #2: A £0 quarter still needs an update
One to file under “good to know before it bites”: earning nothing in a quarter doesn’t mean there’s nothing to do.
If you’re signed up to MTD for Income Tax, every income source needs an update every quarter—and when there’s no activity, that means a nil update. It takes seconds in your software, but it does need to occur.
The same logic applies on a bigger scale. Whether you’re included to follow MTD rules is based on your past qualifying income, so a quiet year—a rental property between tenants, a business you’ve wound down—doesn’t automatically take you out of the system.
Your income needs to stay below the threshold for three consecutive tax years before you can leave MTD for Income Tax behind, and if you’ve stopped trading altogether, you should tell HMRC rather than simply going silent.
Until then, keep those nil updates ticking over: they’re the easiest submissions you’ll ever make, and they keep your record spotless.
Final thoughts
MTD for Income Tax has a reputation as extra admin, but look closer and the system is studded with easements designed to keep it light: early filing, batch record-keeping, simplified totals, flexible quarters and a first year with no late-filing penalties.
So don’t just comply. Take control. Pick the fixes that fit your situation, get your bank feed connected so future quarters run themselves, and start using that quarterly tax estimate to plan ahead.
Ten minutes now, four times a year, in exchange for the possibility of never being surprised by a tax bill again. That’s a trade worth making.
Frequently asked questions
The first quarterly update deadline is 7 August 2026. It covers 6 April to 5 July 2026 (or 1 April to 30 June if you elected calendar quarters) and is submitted through MTD-compatible software, not the HMRC website.
No. A quarterly update is a summary of income and expenses only. Your tax payment dates are unchanged—for most people, that’s 31 January, plus payments on account where they apply.
HMRC has confirmed no late submission penalty points for quarterly updates during 2026/27 for those mandated from April 2026. You must still submit the update eventually, as your year can’t be finalised without it, and penalties apply as normal from 2027/28.
Not if your turnover is below £90,000. Under the three-line accounts easement, your digital records and quarterly updates only need total income and total expenses, with no category breakdown.
For 2025/26, yes—that return is still due by 31 January 2027 under the old rules. For 2026/27 onwards, your four quarterly updates are completed by a year-end tax return (due 31 January 2028 for the first year), where you make final adjustments and claim allowances.
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