Making Tax Digital: How to Submit Your First Quarterly Return

The first Making Tax Digital quarterly deadline is 7 August 2026. That is the Q1 submission for landlords who are in scope from 6 April 2026. If you have not yet signed up, chosen software, or started keeping digital records, you need to act before that date.

Around 259,000 landlords are in phase one of MTD for Income Tax (The Register, April 2026). As of April 2026, only around 28% had signed up. That means the majority of in-scope landlords had not taken action six weeks after the launch. If you are in that group, this guide covers exactly what to do.

What Is a Quarterly Update?

A quarterly update is not a tax return. It does not trigger a payment. It is a summary of your rental income and expenses for a three-month period, submitted to HMRC through approved software.

Your annual self-assessment return still exists under MTD. Instead of doing one large return at the end of the year, you send four quarterly summaries during the year, then complete the year-end return on top of those. Think of it as feeding information to HMRC in four smaller chunks rather than all at once.

Each update is a totals-level summary. It shows HMRC your gross rental income and allowable expenses for the quarter. Your software pulls those totals from your digital records and sends them directly to HMRC. You do not log into a separate HMRC portal to submit. It goes through the software.

Who Must Do This?

MTD for Income Tax applies to landlords whose qualifying income exceeded £50,000 in the 2024-25 tax year.

Qualifying income means gross rental income from property held personally, outside a limited company. It also includes self-employment income if you have any. PAYE salary, pension income, interest, and dividends do not count towards the threshold.

If your gross rental income, combined with any self-employment income, was above £50,000 in 2024-25, you are in scope from 6 April 2026.

Later phases bring in more landlords. From April 2027, the threshold drops to £30,000. From April 2028, it falls to £20,000. If you are not in scope now, you may be caught by one of those later phases.

Your 2024-25 self-assessment return is the place to check. Your gross rental figure, before expenses, is the number that matters.

Step 1: Sign Up

Signing up is not automatic. Using MTD-compatible software does not enrol you. You need to register separately through your Government Gateway account on GOV.UK.

Search for "sign up for Making Tax Digital for Income Tax" on GOV.UK and follow the steps. You will need your National Insurance number and Government Gateway credentials. Once registered, your software can connect to HMRC's systems.

If you use an accountant or tax agent, they can sign you up on your behalf.

Step 2: Choose Your Software

You must use software from the HMRC-recognised list. HMRC maintains a software finder tool at gov.uk/guidance/find-software-that-works-with-making-tax-digital-for-income-tax. Use it to find products suited to your situation.

Several options are widely used by landlords:

General accounting software:

• Xero handles property income well, with tracking categories for individual properties. Plans start at around £7 per month.
• QuickBooks has a Sole Trader plan at around £10 per month.
• FreeAgent is free if you bank with NatWest, RBS, or Mettle, and is MTD-compatible.
• Sage is another recognised option used by landlords with broader accounting needs.

Landlord-specific software:

• Hammock, Landlord Vision, and Landlord Studio are all HMRC-recognised and built around property income. If rental income is your only qualifying source, these tend to be more straightforward than a general accounting package.

Once you have chosen a product, connect it to your HMRC account through the software's own settings. This authorises the software to submit updates on your behalf. It is a one-off step.

Step 3: Keep Digital Records

MTD requires your income and expenses to be recorded digitally throughout the quarter. You cannot wait until July and reconstruct everything from a bank statement. HMRC wants records kept as you go.

For landlords, the records that must be digital are your rental income (rent received per property) and your allowable expenses. Allowable expenses include repairs and maintenance, letting agent fees, buildings and contents insurance, and other costs allowable under HMRC guidance.

Spreadsheets are permitted for record-keeping, provided you use MTD-compatible software to submit the updates to HMRC. If you already track transactions in a spreadsheet, you do not need to abandon it. But submissions must go through compatible software, not directly from a spreadsheet.

Record each property's income and expenses separately. Most software handles this once you set up the individual properties.

If a letting agent collects rent on your behalf, check whether your software can import data from the agent's systems. Several platforms support this. It cuts down on manual entry considerably.

Step 4: Submit Your Q1 Update

Q1 covers 6 April 2026 to 5 July 2026. Once the quarter has ended, open your software, review the income and expense totals it has generated from your digital records, and submit.

The submission goes from your software directly to HMRC. Nothing needs to be completed on GOV.UK separately.

One option worth knowing: if you prefer calendar-month reporting, you can elect to use calendar quarters, which shifts Q1 to 1 April to 30 June. That election must be made in your software before you submit the first update. The 7 August deadline stays the same either way.

Submissions can be made up to 10 days before the quarter ends, provided you are confident your records are complete for the whole period. For most landlords, waiting until after 5 July is the simpler approach.

All Quarterly Deadlines

For 2026-27, the quarterly update periods and deadlines are:

Quarter	Period	Deadline
Q1	6 April to 5 July 2026	7 August 2026
Q2	6 July to 5 October 2026	7 November 2026
Q3	6 October 2026 to 5 January 2027	7 February 2027
Q4	6 January to 5 April 2027	7 May 2027
End-of-year return	Full year 2026-27	31 January 2028

Source: GOV.UK MTD for Income Tax guidance.

The Grace Period: What It Actually Means

For 2026-27 only, HMRC will not issue penalty points for late submission of quarterly updates to landlords who joined MTD from 6 April 2026.

That sounds reassuring. But it has a practical catch. You must submit all four quarterly updates before you can file your end-of-year return. The end-of-year return for 2026-27 is due 31 January 2028, and the grace period does not apply to it.

If you miss the August 7 deadline for Q1, you can still submit it later. When January 2028 arrives, you will need to go back and file any missing quarterly updates before you can complete the year-end process.

The grace period removes the penalty points. It does not remove the obligation to file.

Digital Records: The Key Requirement

You need to record your rental income and expenses as they happen, not reconstruct them at the end of the quarter. Most landlords find this manageable once the software is set up: rent comes in, log it. Repair bill goes out, log it.

You do not need to upload receipts to HMRC or scan documents into an online portal. Digital records means keeping your transactions in your software with enough detail to generate an accurate quarterly summary.

The main thing to avoid is treating the quarterly deadline as a point where you catch up on three months of admin. That defeats the purpose and creates pressure you do not need. A few minutes after each transaction is far easier than an afternoon before the deadline.

What If Your Rental Income Has Stopped?

If all of your MTD-qualifying income ceased before 6 April 2026, you are not required to use MTD for 2026-27. But you need to notify HMRC.

HMRC confirmed in April 2026 that landlords in this situation should contact HMRC by phone or webchat, not through any digital process. Make clear that all of your MTD sources of income have ended. HMRC will update your record and confirm you are not required to use MTD going forward.

Source: ICAEW, April 2026.

This applies only where all qualifying income has stopped. If one property was sold but rental income from another continues, you remain in scope and must proceed with MTD.

After the Quarterly Updates

Quarterly updates lead into the end-of-year return. After Q4, you finalise your figures, claim reliefs and allowances, and submit the end-of-year return through your software. For 2026-27, that deadline is 31 January 2028.

Quarterly updates do not replace the annual return. They feed into it. The practical benefit is that the year-end return should involve far less reconstruction work if you have kept digital records throughout. Four smaller submissions during the year, followed by a final reconciliation, is the shape of tax reporting under MTD.

For the broader context on what MTD means for landlords and how it fits into self-assessment, see our guide to Making Tax Digital for landlords.

This article is for informational purposes only and does not constitute financial or investment advice. Tax rules and legislation change frequently. Always verify current rates with HMRC or GOV.UK and seek independent professional advice before making investment decisions.