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 combined gross income from self-employment and property (UK and foreign) was:

HMRC looks at the 2024-25 tax return you filed by 31 January 2026. Earlier years don't bring you into MTD for April 2026.

Note: The threshold falls to £30,000 from April 2027 (2025-26 income) and £20,000 from April 2028 (2026-27 income). Both are confirmed.

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.

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 7 November 2026)
  3. Q3: 6 October - 5 January 2027 (due 7 February 2027)
  4. Q4: 6 January - 5 April 2027 (due 7 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 free or around £20 a year for basic bridging software to £600+ a year 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 MTD software price comparison, including free trials and money-back guarantees.

Warning: Don't wait until July to choose software. Some providers have waiting lists, and you'll need time to learn the system before your first deadline.

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:

Acceptable Digital Records

HMRC accepts various digital formats:

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:

The quarterly update is much simpler than your annual tax return. You report category totals for each income source, not individual transactions or a tax calculation.

For Landlords

You'll need quarterly totals for:

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

MTD uses penalty points rather than automatic fines for late submissions.

Quarterly Update Penalties

Late payment penalties and interest (Bank of England base rate plus 4%) apply separately if you pay your tax late.

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.

Warning: Unlike Self Assessment, there's no automatic three-month extension if you file online. The deadlines are absolute.

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:

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:

Ready to Get Started?

Affordable MTD is free for the 2026-27 tax year, then £19.99 a year. Simple bridging software that handles your quarterly updates without the complexity or cost of full accounting software.

Start using Affordable MTD for free

MTD for Income Tax is now a reality for sole traders and landlords with qualifying income over £50,000. 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.