If you are a landlord or sole trader whose qualifying income on your 2024/25 return was over £50,000, you have been in Making Tax Digital for Income Tax since 6 April 2026, and your second quarterly update must reach HMRC by 7 November 2026. It is a summary of your income and expenses, not a tax return, and no tax is paid with it. HMRC will not give penalty points for late quarterly updates in 2026/27, but the updates are still compulsory and you cannot file your return for the year without them.
The four deadlines
Each quarterly update is cumulative: it covers everything from the start of the tax year to the end of the latest period, so the 7 November update includes the new transactions from 6 July to 5 October on top of what you sent in August. Because it is a running total, a mistake in an earlier quarter can simply be corrected in the next one.
| Standard periods (tax year) | Calendar periods (if elected) | Deadline |
|---|---|---|
| 6 April to 5 July 2026 | 1 April to 30 June 2026 | 7 August 2026 |
| 6 April to 5 October 2026 | 1 April to 30 September 2026 | 7 November 2026 |
| 6 April 2026 to 5 January 2027 | 1 April to 31 December 2026 | 7 February 2027 |
| 6 April 2026 to 5 April 2027 | 1 April 2026 to 31 March 2027 | 7 May 2027 |
The calendar periods suit businesses whose accounts run to 31 March. You choose them in your software, and the choice has to be made before the first update of the year is sent. Once an update has gone in, you are locked into that basis for the rest of the year. You can file any time after a period ends, and HMRC allows an update to be sent up to ten days early if you know nothing else will happen in that quarter.
What a quarterly update is, and what it is not
- It is a set of category totals. Your software adds up your digital records (rent, repairs, sales, travel and so on) using the same categories as the Self Assessment return. HMRC does not see the individual invoices or receipts.
- Each business needs its own update. All your UK lettings count as one property business, foreign lettings as another, and each self-employment is separate.
- A nil update is still an update. If nothing came in or went out in the quarter, you still have to tell HMRC.
- No accounting or tax adjustments are needed. Those come at the end of the year.
- No tax is due with it. Payment dates are unchanged: 31 January and 31 July, with the balance for 2026/27 due on 31 January 2028.
After the fourth update, you make your year-end adjustments, add any other income (savings, dividends, partnership profits, capital gains) and submit your 2026/27 tax return through the same software by 31 January 2028. Your 2025/26 return, due on 31 January 2027, is still filed the old way.
Joint owners of let property have some easements: they only record their own share, and they can choose to send income only in the quarterly updates and add their share of expenses after the year end.
Penalties: the soft landing, and what comes after
MTD replaces the old Self Assessment penalties with a points-based system for late filing and a separate system for late payment.
- Late quarterly updates in 2026/27: no penalty points. HMRC has confirmed this easement for the first year.
- Late tax return: a missed 31 January deadline does earn a point, including for 2026/27.
- From 2027/28: each missed quarterly deadline earns a point, with a maximum of one point per deadline even if you run several businesses. At 4 points you pay a £200 penalty, and another £200 for each further missed deadline while you remain at the threshold.
- Clearing points: below the threshold, each point expires after 24 months. Once at the threshold, you need 12 months of on-time filing and no outstanding returns or updates from the previous 24 months.
Late payment penalties apply to the balancing payment, not to payments on account. For 2026/27 tax there is nothing to pay if you settle within 15 days of the due date; after that, 3% of the tax then unpaid, a further 3% at day 30, and from day 31 a charge at 10% a year until paid. In your first year under the new rules HMRC gives you 30 days to pay or agree a payment plan before penalties start. Interest runs from the due date regardless. For 2027/28 the two fixed charges rise to 4%.
Joining from April 2027: qualifying income over £30,000
If your qualifying income on your 2025/26 return is over £30,000, you must join from 6 April 2027. The threshold falls again to £20,000 from 6 April 2028, based on your 2026/27 return. Both steps are now in law, in the Income Tax (Digital Obligations) Regulations 2026.
Qualifying income is your gross self-employment turnover plus your gross property income, before any expenses. For example, rents of £18,000 and freelance fees of £14,000 give £32,000, even if your profit is a fraction of that. It does not include employment income, pensions, dividends, savings interest or your share of partnership profits.
For a jointly owned property, only your share of the rent counts. A couple sharing £50,000 of rent equally, with no other business income, have £25,000 each: outside the April 2027 group, but inside the £20,000 test for April 2028.
Some people are exempt. These include anyone who is digitally excluded, for example because age, disability or location makes using software unreasonable. You have to apply for that exemption, and unfamiliarity with software or extra cost will not qualify. Others are exempt automatically or for a limited time, such as those who filed the non-residence pages, claimed averaging relief or foster carers' relief, and those with no National Insurance number. Partnerships are not yet in.
What to do now
- Check your records are complete to 5 October (or 30 September), and that every transaction is categorised.
- Send the update before 7 November, even though no point is at stake this year. Next year it will count.
- Look at the tax estimate your software shows after the update, and set money aside for January 2028.
- If you have not signed up but should have, sign up now and catch up your records from 6 April.
- If your 2025/26 income is near £30,000, work out your qualifying income before you file that return by 31 January 2027, and choose software in good time.
Our guide to who is in Making Tax Digital, and when covers the timetable, and our landlords page explains how we help with property income. We can send your quarterly updates for you. Book a consultation to get set up.
This article is general information about UK tax, based on the law and HMRC practice at the date shown above. It is not advice, and reading it does not make you our client. Tax rules change and their effect depends on your circumstances, so please speak to us before acting on it.