Making Tax Digital Quarterly Updates: Thresholds, Deadlines and Records

Making Tax Digital for Income Tax adds regular digital reporting to the record keeping many sole traders and individual landlords already do. If the rules apply, you record income and expenses digitally and send HMRC a summary through compatible software four times a year. The summaries don’t trigger a new tax payment: you still file one annual Self Assessment return, with its own deadline.

The income test and the reporting figures use different measures. To see if you must join, add your gross sole-trader and property income for the relevant tax year before deducting expenses. A PAYE salary doesn’t count. Once enrolled, though, you report the income and expenses for each business in separate summaries.

Who joins, and when?

The first compulsory group started on 6 April 2026. It covers sole traders and individual landlords whose qualifying income was more than £50,000 in 2024/25, unless an exemption applies. That means the test uses the money coming in, not the profit left after business costs.

For example, £38,000 in customer receipts and £14,000 in rent add up to £52,000 of qualifying income. The person crosses the threshold even if materials, insurance and repairs reduce their profit considerably. If the £14,000 instead came from a PAYE job, qualifying income would be £38,000, below the threshold on those figures.

Later start dates use earlier tax years to determine eligibility. For the April 2027 intake, check income from 6 April 2025 to 5 April 2026. For the April 2028 intake, use the following tax year. The threshold for that April 2028 intake is £20,000.

Consider a handmade goods business with £24,000 in sales and £9,000 in materials and other allowable costs during 2026/27. Its profit is £15,000, but the £24,000 in gross income exceeds the April 2028 threshold. HMRC estimates that reducing the threshold from £30,000 to £20,000 will bring in around 970,000 more sole traders and landlords. Exactly £20,000 does not exceed the threshold. Anyone already using the service should check their existing obligations before changing how they report.

These thresholds determine when digital reporting becomes compulsory. Falling below one doesn’t necessarily remove the need to file a Self Assessment return. If you’re unsure which start date or exemption applies, use HMRC’s eligibility checker.

What goes in each update?

Your software totals income and costs by category as you enter them. A decorating business, for example, might record customer payments and costs such as paint and brushes. It sends those running totals to HMRC. If you also have a property business, you submit a separate summary for it, even though both income sources count towards the entry test.

The summaries give you and HMRC a view of business figures during the year. That can help with budgeting for a future tax bill, but the estimate depends on the accuracy of your records. If a £60 materials purchase is entered as £600, correct the original digital record as soon as you spot the error. The updates build on figures from the start of the tax year, so the next update carries the corrected total; you don’t need to resend the earlier one.

The annual return brings the full year’s figures together with other income and any adjustments needed to work out what you owe. The usual online filing deadline is 31 January after the tax year ends. The 2026/27 return is due by 31 January 2028. Someone joining in April 2026 may also need to file a 2025/26 return, which is due by 31 January 2027.

Quarterly dates and software choices

The four filing deadlines are the same whether you report using standard tax-year periods or calendar periods. The difference is the final day covered by each update. HMRC’s reporting calendar explains how to select calendar periods in your software before sending the first update of the year.

For 2026/27, the second update using standard periods covers 6 April to 5 October 2026. It can be sent through Saturday 7 November 2026. A business using calendar periods reports figures through 30 September, but has the same filing deadline. HMRC announced special Self Assessment helpline hours of 9am to 3pm for that Saturday.

You can keep using a spreadsheet if you connect it to compatible bridging software that submits the figures. Alternatively, accounting software can handle record keeping and submissions in one place; some options are free. Before paying for a subscription, check HMRC’s software finder for support with your income sources and annual return as well as quarterly updates.

Exemptions, missed updates and confirmation

Health, disability or a lack of reasonable internet access may make digital reporting impractical. Check HMRC’s exemption guidance: some exemptions apply automatically, while digital exclusion requires an application. If you should already be using the service but haven’t signed up, there’s a sign-up route for the current tax year.

After sending an update, check its status in your software or HMRC online account. If the submission appears in the history, HMRC says you don’t need to call for confirmation. If it’s missing, check for an error message before assuming it went through.

If you miss a deadline, update your records and send the outstanding summary. HMRC’s first-year concession means there are no late quarterly update penalties for 2026/27, but you must send the updates before filing your annual return. Putting all four deadlines and the January return date in your diary can help you keep the two reporting schedules straight.

Choosing help with submissions

Pie offers a free Making Tax Digital app for people who want to maintain their own records, send quarterly updates and file the annual return themselves. If you already keep clear records and mainly need a way to submit them, that may cover the task. Its paid package is listed at £199 a year and includes registration, four quarterly updates, the final annual submission and tax support during the year. If you already pay an accountant, check what that fee covers before paying again for the same filings.

The writer may earn a referral reward when someone uses the Pie referral link and completes a qualifying filing. The code is pie-alasdair_0jw3. Check the offer in the app before paying, including whether any £50 reward comes off the price or is paid back after filing.

For general tax information, check the eligibility and software details against your own circumstances. Accurate records, suitable software and diary reminders make the quarterly routine easier to manage.