After Your Q1 MTD Submission: What Records You Must Keep

You've submitted your Q1 update - now what?

Hitting send on your first MTD quarterly update feels like crossing a finish line. But in terms of your legal obligations, it's really more of a checkpoint. The moment your Q1 update lands with HMRC, a new set of responsibilities begins - and most people don't realise this until something goes wrong. This post covers exactly what records you must keep after submission, how long you're legally required to hold onto them, what happens if HMRC asks questions, and when Q2 recording officially kicks in.

What a quarterly update actually is (and isn't)

A quarterly update is a summary of your income and expenses for a three-month period. It is not a tax return. It does not finalise your tax bill. It does not replace the need to keep underlying records. Think of it as a progress report - HMRC uses it to build a picture of your finances across the year, but they can still ask to see the detail behind every figure you submitted.

Your Q1 period runs from 6 April 2026 to 5 July 2026. The deadline for submitting that update was 7 August 2026. Whether you submitted on the first day or the last, the record-keeping rules that follow are exactly the same.

If you are unsure how quarterly updates differ from the annual tax return you file in January, the post on quarterly updates vs final declaration explains the distinction in plain terms.

Which records HMRC requires you to keep

HMRC does not accept your submitted figures as evidence on their own. They expect you to hold the source records that back up every number in your quarterly update. These fall into two categories depending on whether you are a sole trader, a landlord, or both.

For sole traders

• Invoices you issued to clients or customers
• Bank statements showing payments received
• Receipts or invoices for every expense you claimed
• Records of any cash income received
• Mileage logs if you claimed vehicle expenses using simplified rates
• Records of any goods or equipment you bought for the business
• Any contracts or agreements relevant to your work

If you claimed mileage at the simplified rate (45p per mile for the first 10,000 miles), you need a log that shows the date, start and end point, business purpose, and distance for each journey. A spreadsheet or diary works fine. The rules around this are covered in more detail in the post on mileage allowances for MTD.

For landlords

• Tenancy agreements for every property
• Rent statements or rent books showing dates and amounts received
• Bank statements confirming rental income
• Receipts for repairs, maintenance, and any other deductible expenses
• Records of letting agent fees and commissions
• Insurance documents
• Records of any deposits held (even if not taxable income)
• Evidence for any allowances claimed, such as the property income allowance

Landlords with multiple properties need records for each one separately - not just a combined total. HMRC's approach to rental income enquiries is detailed in this guide on rental income enquiry records.

If you have mixed income

If you are both self-employed and a landlord, you need to maintain separate records for each income source. Mixing them together creates problems both for your quarterly updates and for any HMRC enquiry. The post on multiple income sources and MTD walks through how to keep these distinct.

How long you must keep your records

This is where many people get caught out. The legal minimum for keeping records under Making Tax Digital is five years after the 31 January self-assessment deadline for the relevant tax year.

For Q1 of the 2026-27 tax year, that means keeping your records until at least 31 January 2033. That is not a typo. The five-year clock starts from the filing deadline of the annual tax return, not from when you submitted your quarterly update.

HMRC sets out these requirements formally. You can read the official guidance on record-keeping for self-employed people on GOV.UK.

For landlords, HMRC applies the same five-year rule to property income records. If you also own property as part of a business or have capital gains considerations, the retention period for some asset-related records can be longer - if in doubt, keep everything for at least six years.

What HMRC enquiry timelines look like

Understanding when HMRC can ask questions about your records helps you understand why the five-year rule matters in practice.

HMRC has different time limits depending on the circumstances:

• Routine enquiry: HMRC can open an enquiry into your tax return within 12 months of filing it. For the 2026-27 tax return (filed by 31 January 2028), a routine enquiry could arrive any time before 31 January 2029.
• Where HMRC suspects an error or careless mistake: They can go back four years from the end of the tax year in question.
• Where HMRC suspects deliberate underreporting: They can go back 20 years.

For most honest filers, the practical risk window is the 12-month enquiry window plus the four-year window for errors. That is why keeping records for five years from the January deadline covers you in the vast majority of cases.

HMRC can ask about any figure in your quarterly update during an enquiry - even though the update itself is not a final return. Because your quarterly figures feed into your annual tax return, any error in a quarterly update that flows through to the final return is fair game for HMRC to investigate.

If HMRC does contact you about your rental income in particular, the guide on how to respond to HMRC rental income questions gives practical advice on what to expect and what to send them.

Organising your records now - before you forget

The best time to organise your Q1 records is immediately after submission - while everything is still fresh. Within the next few days, do the following:

1. Create a clearly labelled folder - digital or physical - called something like "MTD 2026-27 Q1 (April to July 2026)".
2. Put all receipts, invoices, bank statements, and mileage logs for that period into it.
3. Keep a copy of the quarterly update figures you submitted - a screenshot or export from your software is fine.
4. Make a note of any figures you were unsure about, so you can address them before the annual tax return.
5. Back up digital records somewhere other than your phone - cloud storage, email, or a USB drive.

If your records for Q1 are not as tidy as you would like, the post on HMRC record-keeping standards for MTD covers what the minimum acceptable standard looks like - and how to get there without hours of effort.

When Q2 recording officially begins

Q2 of the 2026-27 tax year started on 6 July 2026. The Q2 period runs from 6 July 2026 to 5 October 2026, and the deadline for submitting the Q2 quarterly update is 7 November 2026.

This means Q2 recording had already begun before your Q1 deadline passed. There is a deliberate overlap built into the MTD calendar - you were legally recording Q2 income and expenses from 6 July even while you were still finalising and submitting Q1. If you have not yet started logging Q2 activity, start now. Every week of missing records creates a problem you will need to fix later under time pressure.

The post on managing Q1 final edits while starting Q2 records explains how to handle this overlap practically without muddling the two periods together.

For a clean start on Q2, the guides on setting up clean Q2 records in week one and Q2 MTD preparation from 6 July are worth reading now.

Common record-keeping mistakes to avoid now

Based on the most frequent problems people encounter after their first quarterly update, here are the things most likely to cause trouble if you do not address them immediately.

Not separating Q1 and Q2 records

Receipts and bank transactions from early July can accidentally end up logged in the wrong quarter. A transaction dated 5 July belongs in Q1. One dated 6 July belongs in Q2. Keep them separate from day one rather than trying to unpick them later.

Losing receipts after submission

Many people assume that once the update is submitted, the receipts behind it can be discarded. As explained above, that is not the case. Photograph paper receipts immediately. Do not let them accumulate in a bag or drawer where they can be lost or damaged.

Not keeping a record of what you submitted

Your bridging software or MTD software should allow you to export or view what you submitted. Keep a copy. If HMRC asks about a specific figure, you need to be able to match it to your source records quickly.

Missing bank statement coverage

Bank statements need to cover the full Q1 period without gaps. If you have multiple accounts - personal and business, or accounts for different properties - you need statements for all of them for the April to July period.

Forgetting cash income

If any of your income was received in cash during Q1 and you included it in your quarterly update, you need a record of it. A simple written log with dates and amounts is acceptable. The absence of any record of cash income is a red flag in an enquiry.

What "good enough" records look like

You do not need a professional accounting system to have records that satisfy HMRC. What matters is that your records are:

• Complete - covering every transaction in the period
• Legible - readable and not corrupted or faded
• Consistent - matching your bank statements where income or payments appear
• Retained - kept for the full five-year period from the January filing deadline

A well-organised spreadsheet backed up by scanned receipts meets this standard. The test is whether someone else - an HMRC inspector who has never seen your accounts before - could follow your records and verify your figures without your help.

If you submitted your Q1 update and you are not confident your underlying records meet this standard, the post on what HMRC actually needs for Q1 records gives a practical checklist to work through.

Summary

Submitting your Q1 quarterly update is an important milestone, but it does not end your obligations for that period. You must keep the source records behind every figure you submitted - invoices, receipts, bank statements, mileage logs, and tenancy agreements - for at least five years from the 31 January deadline of the relevant tax year. HMRC can enquire into any of those figures, and without the records to back them up, you are in a difficult position. At the same time, Q2 recording started on 6 July, so the practical task right now is to file your Q1 records safely away and start Q2 with a clean, organised system. The more disciplined you are in these first few weeks, the less pressure you will face as each deadline approaches.