Your MTD ITSA Checklist: What to Do Now (6 April 2026 Onwards)

MTD for Income Tax is now live. If you're a sole trader or landlord with gross income over £50,000, you need to be filing quarterly updates - starting with your first quarter that began on 6 April 2026.

This isn't something you can put off. Your first quarterly update is due by 7 August 2026, covering the period from 6 April to 5 July 2026. That gives you just four months to get your systems in place, choose your software, and file on time.

Here's exactly what you need to do right now to stay compliant and avoid penalties.

Check If You're Affected (Again)

First things first - make sure MTD actually applies to you. The rules are based on your gross income from self-employment or property rental.

You need to follow MTD rules if your gross income from self-employment or UK property rental was:

• Over £50,000 in the 2024-25 tax year (6 April 2024 to 5 April 2025)
• OR over £50,000 in the 2023-24 tax year
• OR over £50,000 in any tax year since 2022-23

This means even if your income dropped below £50,000 recently, you might still be caught if you exceeded the threshold in previous years.

Not sure if you're affected? Use our free MTD checker to find out in 30 seconds.

Understand Your First Quarter Period

MTD works on quarterly periods that run from 6 April each year. Your first quarter under the new rules is:

Q1: 6 April 2026 to 5 July 2026

This quarterly update must be filed by 7 August 2026 - one month after the quarter ends.

Even if you haven't kept digital records before, you need to have them in place from 6 April 2026 onwards. You can't retrospectively create digital records for this period.

Your Complete Quarterly Schedule

Here are all four quarterly periods and deadlines for 2026-27:

1. Q1: 6 April - 5 July 2026 (due 7 August 2026)
2. Q2: 6 July - 5 October 2026 (due 5 November 2026)
3. Q3: 6 October - 5 January 2027 (due 5 February 2027)
4. Q4: 6 January - 5 April 2027 (due 5 May 2027)

For the complete schedule including future years, see our MTD quarterly deadlines guide.

Choose Your MTD Software Now

You cannot file quarterly updates using HMRC's online services or paper forms. You must use MTD-compatible software.

But here's the thing - you don't need expensive accountancy software. Most sole traders and landlords can use simple bridging software that costs a fraction of the price.

What Is Bridging Software?

Bridging software lets you keep using familiar tools like Excel spreadsheets or basic accounting software, then bridges the gap to submit your quarterly updates to HMRC.

You prepare your figures however you normally do, enter the quarterly totals into the bridging software, and it handles the technical submission to HMRC. Simple and cost-effective.

For a detailed explanation, read our bridging software guide.

Software Options and Costs

MTD software prices vary wildly - from £60 per year for basic bridging software to £600+ for full accountancy packages.

Unless you need advanced features like invoicing, payroll, or multi-user access, bridging software is usually the most cost-effective choice.

We've compared every available option in our cheapest MTD software guide, including free trials and money-back guarantees.

Set Up Your Digital Records

MTD requires you to keep digital records of your income and expenses. This doesn't mean everything must be automated - you can still use spreadsheets or simple accounting software.

What Records You Need

For each quarter, you need digital records showing:

• Income: All business income or rental income received
• Expenses: All allowable business expenses or property costs
• Date: When each transaction occurred
• Amount: The value of each transaction
• Description: What each transaction relates to

Acceptable Digital Records

HMRC accepts various digital formats:

• Excel or Google Sheets spreadsheets
• Accounting software (QuickBooks, Xero, FreeAgent, etc.)
• Specialist property software (for landlords)
• Cloud-based bookkeeping tools

The key requirement is that your records must be stored digitally and preserved electronically. You can't just scan paper records - the original record-keeping must be digital.

Gather Your Information for Q1

Start collecting the information you'll need for your first quarterly update covering 6 April to 5 July 2026.

For Sole Traders and Freelancers

You'll need:

• Total income received in the quarter
• Total allowable expenses incurred in the quarter
• Class 2 NICs basis (if applicable)

The quarterly update is much simpler than your annual tax return. You're just reporting total income and total expenses for the quarter - no detailed breakdown required.

For Landlords

You'll need quarterly totals for:

• Rental income received
• Property expenses (repairs, insurance, agent fees, etc.)
• Mortgage interest (if claiming tax relief)

If you have multiple properties, you can report combined figures for all UK rental properties in a single quarterly update.

For detailed guidance, see our complete MTD guide for landlords.

Set Up Your HMRC Business Tax Account

You'll need an HMRC Business Tax Account to receive your quarterly submission confirmations and manage your MTD obligations.

If you don't already have one:

1. Go to the HMRC website
2. Create a Business Tax Account
3. Link it to your existing Self Assessment UTR
4. Verify your identity using Government Gateway

This can take a few days to set up, so don't leave it until the last minute.

Understand the Penalties

HMRC takes MTD deadlines seriously. Late filing penalties start immediately after each deadline passes.

Quarterly Update Penalties

• 1 day late: £100 fixed penalty
• 3 months late: Additional £300 penalty
• 6 months late: Additional £300 penalty
• 12 months late: Additional penalty up to £300 or 5% of tax due

These penalties apply to each late quarterly update. If you miss all four quarters, you could face £1,600 in penalties before any tax-geared penalties.

There's no grace period and no small claims exemption. The penalties apply regardless of whether you owe any tax.

For complete details, read our MTD penalties guide.

Plan Your Quarterly Routine

MTD works best when you develop a regular routine rather than scrambling before each deadline.

Monthly Record-Keeping

Consider updating your records monthly rather than quarterly. This makes each quarterly submission much easier and reduces the risk of missing transactions.

Set Deadline Reminders

Put all four quarterly deadlines in your calendar with reminders a week before each one:

• 7 August 2026
• 5 November 2026
• 5 February 2027
• 5 May 2027

Annual Tax Return

Remember - quarterly updates don't replace your annual tax return. You'll still need to complete your 2026-27 tax return by 31 January 2028.

The quarterly updates provide data for your annual return, but the final tax calculation and payment happens annually.

Get Help If You Need It

MTD is simpler than it first appears, but it's normal to feel overwhelmed when starting.

HMRC Support

HMRC offers free webinars and phone support for MTD questions. Their helpline is generally helpful for technical queries about what information to include.

Professional Help

If your tax affairs are complex - multiple income sources, partnerships, significant capital transactions - consider getting professional help for at least your first few quarters.

Many accountants offer MTD-only services at lower rates than full accountancy packages.

Common First-Quarter Mistakes to Avoid

Learn from others' mistakes:

• Using paper records: Digital record-keeping must start from 6 April 2026 - you can't convert paper records later
• Wrong quarter dates: Quarters run 6 April - 5 July, not calendar months
• Missing the deadline: There's no grace period - file by 7 August 2026 or face a £100 penalty
• Not keeping records: You need underlying digital records, not just the quarterly totals
• Forgetting about tax returns: Quarterly updates don't replace your annual tax return

MTD for Income Tax is now a reality for thousands of sole traders and landlords. The first deadline of 7 August 2026 will arrive quickly, but with the right software and a simple routine, quarterly updates become just another part of running your business. The key is starting now, not waiting until the last minute.