How Making Tax Digital quarterly updates work for sole traders and landlords
Written by Al Baker | Founder & Editor, The Penny Pincher - Last updated: the 2nd of November 2026
Making Tax Digital for Income Tax changes what you do with the records you already keep as a sole trader or landlord.
If the rules apply to you, you record your income and expenses digitally and send HMRC a summary through compatible software four times a year. You still file one annual Self Assessment return, and sending a quarterly update doesn’t give you a new tax bill to pay.
This article gives general tax information. Use HMRC’s eligibility checker if you’re unsure which start date or exemption applies to you.
Who has to send quarterly updates to HMRC?
The first compulsory group started on 6th April 2026. It includes sole traders and individual landlords whose total qualifying income was more than £50,000 in 2024/25, unless an exemption applies. For this test, add up the money coming in from your sole-trader businesses and property before deducting expenses. Leave out your wages from a PAYE job.
Say you took £38,000 from customers and received £14,000 in rent in 2024/25. That makes £52,000 of qualifying income, so you cross the threshold even if materials, insurance and repairs left you with considerably less to live on. If the same £14,000 came from a PAYE job instead, your qualifying income would be £38,000. On those figures alone, you wouldn’t have had to join in April 2026.
What if your income is closer to £30,000 or £20,000?
The tax return HMRC uses to decide when you join relates to an earlier year. For the April 2027 intake, for example, you look at income received between 6th April 2025 and 5th April 2026. For the April 2028 intake, use the following tax year. The limits below determine when digital reporting becomes compulsory, so even if your income falls below them you may still need to file a Self Assessment return.
Take someone selling handmade goods who brings in £24,000 in 2026/27 and spends £9,000 on materials and other allowable business costs. Their £15,000 profit is the figure they might have in mind when they hear the word ‘earnings’, but the £24,000 in sales takes them over the April 2028 threshold. HMRC estimates that lowering the threshold to £20,000 will bring in around 970,000 more sole traders and landlords.
If April 2027 looks like your start date, my guide to the £30,000 Making Tax Digital rule goes into more detail about preparing for your first year.
What goes into a quarterly update and why does HMRC ask for it?
Imagine you run a decorating business. As you record customer payments and costs such as paint and brushes, your software adds them up by category. It’s those running totals that go to HMRC. If you also have a property business, you send a separate summary for that business, even though you added the two sources of income together to decide whether you had to join.
HMRC asks for regular summaries so it has an up-to-date picture of your business during the year. For you, that means you can look at an estimate while there’s still time to budget for your tax bill. Say a £60 materials bill goes into your records as £600 and you only notice after sending an update. Correct the original entry as soon as you spot it, because the figures build up from the start of the year, the next update carries the corrected total without you having to resend the earlier one.
Your annual return brings the full year’s figures together with any other income and adjustments needed to establish what you owe. The usual online filing deadline is 31st January after the end of the tax year, so the 2026/27 return is due by 31st January 2028. If you join in April 2026 and also need to file a 2025/26 return, that earlier return still has its own deadline of 31st January 2027.
When are the four quarterly updates due?
HMRC sets the same four deadlines whether you use standard tax-year periods or calendar periods. What changes is the last day of the records included in each submission. The HMRC reporting calendar also explains how to select calendar periods in your software before you send your first update of the year.
For example, under standard periods the second update for 2026/27 covers 6th April to 5th October 2026, and can be sent up to and including Saturday 7th November 2026. A business using calendar periods would instead report to 30th September, with the same filing deadline. In its announcement for that particular Saturday, HMRC also set out special Self Assessment helpline hours of 9am to 3pm.
Can you carry on using a spreadsheet?
If a spreadsheet already works for your business, you can keep it and connect it to compatible bridging software that sends your figures to HMRC. There are also accounting packages that keep the records and send the updates in one place, including some free options. Before paying for a subscription, use HMRC’s software finder to see which options cover your income sources and how you’ll submit the annual return as well as the quarterly updates.
If health, disability or a lack of reasonable internet access makes digital reporting impractical, read HMRC’s exemption guidance. Some exemptions apply automatically, while digital exclusion is one you need to apply for. If you should already be using the service and haven’t signed up, HMRC also has a sign-up route for the current tax year.
Could Pie help with your quarterly updates?
If you’re happy keeping your own records and sending the figures to HMRC, Pie offers a free Making Tax Digital app. You can use it to sort your business income and expenses, send your quarterly updates and file your annual return yourself. If you already keep good records and mainly need a way to submit them, that’s where I’d start.
Where the paid option could earn its keep is if you’d like someone to handle the submissions and answer tax questions during the year. Pie lists its full MTD package at £199 a year, including MTD registration, four quarterly updates, the final annual submission and year-round tax support. If you already pay an accountant, check what your existing fee covers before paying twice for the same filings.
I may earn a referral reward if you use my Pie referral link and complete a qualifying filing. If the app asks for a code, mine is pie-alasdair_0jw3. Check the offer shown in the app before you pay, including whether any £50 reward is taken off the price or paid back after filing.
How do you know HMRC received your update?
Once you’ve sent an update, you can check the submission history in your software or HMRC online account. If the update is there, HMRC says there’s no need to ring for confirmation. If it’s missing, look for an error message in your software before assuming it went through.
If you miss a deadline, bring your records up to date and send the outstanding update. HMRC’s first-year concessionmeans there are no late quarterly update penalties for the 2026/27 tax year, but the updates still have to be in before you can file the annual return. When you set up your software, put all four dates in your diary alongside the January return date so you know which job is due each time.
Frequently asked questions
Does my salary count if I also work for myself?
Your PAYE salary is left out of the Making Tax Digital income test. Add together your gross sole-trader and property income for the relevant tax year before taking off expenses.
Do I pay Income Tax every time I send a quarterly update?
No payment falls due as a result of sending the update. Your annual Self Assessment return and any payments already due under Self Assessment keep their own deadlines.
Does exactly £20,000 mean I must start in April 2028?
Exactly £20,000 of qualifying income in 2026/27 doesn’t cross the entry threshold for April 2028. If you already use Making Tax Digital, check your existing obligations before changing how you report.
Can I correct a figure after I’ve sent my quarterly update?
Yes. Correct the underlying digital record as soon as you spot the mistake. If you’ve already sent an update and there’s another one due for that tax year, the next cumulative update will include the corrected figure.
