Q2 MTD Week 1: Get Your Records Right From Today (6 July 2026)

Q2 starts today - here's what to do in the first seven days

The second quarter of Making Tax Digital opened on 6 July 2026. That means you have until 5 October 2026 to submit your Q2 quarterly update to HMRC - but the taxpayers who find October easy are almost always the ones who got their records straight in the first week of July. This post is a practical, first-week checklist. Work through it now and you will avoid the scramble that catches most people out later in the quarter.

Why Week 1 of Q2 actually matters

Most people treat the start of a new quarter as a non-event. They carry on as normal, promising themselves they will sort the records out nearer the deadline. That is exactly how you end up in a panic in late September.

The July-to-October quarter tends to be the busiest one for sole traders. Summer invoicing, irregular cash flow, holiday periods, and the overlap with payments on account due in July all create noise. If your bookkeeping system is not ready from day one, three months of messy records is a much bigger problem than three weeks of messy records.

Getting Q2 right from the start also means your Q1 lessons are still fresh. If you have just come through your first quarterly update, there are a few things you should do straight after submitting Q1 before diving into Q2 - this post picks up from there.

Step 1: Check your opening position

Before you record a single Q2 transaction, you need to know where Q1 ended. This sounds obvious, but a lot of people skip it.

Confirm your Q1 figures are finalised

Log into your MTD software and check that your Q1 quarterly update was accepted by HMRC. If you submitted before 7 August and received a confirmation, you are fine. If you are still waiting, or if you spotted an error after submitting, read the guide on amending your Q1 update before the August deadline.

Reconcile your Q1 closing balances

Check the following against your actual bank statements for the period 6 April to 5 July 2026:

• Total gross income recorded in Q1
• Total allowable expenses recorded in Q1
• Any invoices raised in Q1 but not yet paid (if you use invoice-date accounting)
• Any expenses paid in Q1 that covered future periods

If those figures match your bank statements, you have a clean opening position for Q2. If they do not match, fix the discrepancy now rather than letting it compound over another three months. The guide on Q1 income and expense reconciliation walks through this in detail.

Step 2: Set up your income tracking for Q2

From 6 July, every pound of income needs to be recorded correctly. The specific categories you use depend on whether you are a sole trader, a landlord, or both.

Sole traders

Record income under your business category. If you have multiple income sources - for example, self-employment alongside rental income - keep them separate from day one. HMRC treats these as distinct income streams for MTD purposes. The guide on managing multiple income sources under MTD explains how to handle this correctly.

Landlords

Rental income should be recorded as it is received. If you manage more than one property, record income per property where your software allows - this makes it much easier to answer questions later. For more on what landlords specifically need to include, see what landlords must include in their quarterly updates.

Mixed income

If you have both self-employment and rental income, your MTD software should be set up with separate income streams. If you have not checked this yet, now is the time. This Q1 setup check for mixed-income landlords covers the configuration you need.

Step 3: Review your expense categories

This is the step most people underestimate. Expense categories are not just an admin detail - they directly affect your tax position.

Use the correct HMRC categories

HMRC specifies the expense categories that apply to MTD quarterly updates. The common ones for sole traders include:

• Cost of goods sold
• Construction industry costs (if applicable)
• Staff costs
• Travel and vehicle costs
• Premises costs (rent, rates, power)
• Repairs and maintenance
• Professional and financial services
• Advertising and marketing
• Office costs
• Other allowable business expenses

For landlords, the main categories are different - they cover property repairs, finance costs, legal fees, and management costs, among others. The full breakdown is in the guide to allowable expenses for MTD.

Sort out any miscategorised Q1 expenses now

If you imported expenses from a spreadsheet or bank feed in Q1 and used a catch-all category like "other expenses" for things you were unsure about, go back and recategorise them now. It is much easier to do this with fresh eyes than it will be in October when you are trying to remember what a payment from March was for.

If you are using CSV imports, the guide to importing expenses by CSV and using AI categorisation will help you get cleaner data into your software from the start of Q2.

Check your mileage records

If you use a vehicle for business and claim the simplified mileage rate, make sure you are logging journeys from 6 July. A rough note in your phone is fine as a starting point - but you will need date, purpose, start point, and end point for each journey. How mileage allowances work under MTD covers the rates and what records you need.

Step 4: Set up your bank reconciliation routine

Bank reconciliation is the process of checking your recorded income and expenses against your actual bank statements. Done weekly, it takes about ten minutes. Done monthly, it takes an hour. Done once at the end of the quarter, it takes most of a day - and you will probably make mistakes.

Connect your bank feed if you have not already

Most MTD software, including AffordableMTD, allows you to import transactions directly from your bank. If you are still manually entering transactions, switching to a bank import will save you a significant amount of time and reduce errors.

Set a weekly reconciliation slot

Pick a day each week - Friday afternoon or Monday morning works well for most people - and block out fifteen minutes to check your records. You are looking for:

• Any transactions in your bank that are not in your MTD records
• Any recorded transactions that do not match the actual bank amounts
• Any income received that has not been categorised yet
• Any expenses that need recategorising

Doing this weekly means you are never more than seven days behind. That is a manageable gap. Three months is not.

Step 5: Know the Q2 deadlines and what they mean for you

The Q2 quarterly update covers income and expenses from 6 July 2026 to 5 October 2026. The submission deadline is 7 November 2026 (5 November falls on a Thursday, so the statutory deadline applies - always check the exact date on HMRC's guidance).

But there are other dates to keep in mind during Q2:

• 31 July 2026 - Second payment on account is due if you were in self assessment last year. This is a payment, not a filing deadline, but it affects your cash flow during the quarter. See the full explainer on MTD and payments on account.
• 7 August 2026 - The Q1 quarterly update deadline. If you have not submitted yet, this is urgent. Everything in this post assumes Q1 is already done.
• 5 October 2026 - Q2 ends. Your records need to be complete up to this date.

For the full set of quarterly deadlines across the 2026-27 tax year, see every MTD deadline for 2026-27.

Step 6: Make sure your record-keeping meets HMRC standards

MTD does not just require you to submit figures. It requires you to keep the underlying records that support those figures. HMRC can ask to see them.

The records you need to keep include:

• Receipts and invoices for all business expenses
• Sales invoices or records of income received
• Bank statements
• Mileage logs (if claiming vehicle costs)
• Rental agreements and letting agent statements (for landlords)

HMRC's record-keeping requirements are covered in detail in the guide to HMRC record-keeping standards for MTD compliance. If you are a landlord and want to know specifically what HMRC looks at during an enquiry, this guide on rental income enquiry records is worth reading.

Digital storage is fine. A photo of a receipt on your phone, saved to a cloud folder, counts. You do not need paper. But you do need to keep records for at least five years after the 31 January filing deadline for the relevant tax year.

Step 7: Decide how you will handle expenses as they happen

The biggest predictor of a chaotic October is not the size of your business - it is whether you have a clear system for logging expenses as they occur or batch them up and hope for the best.

Here are three approaches that work:

1. Log as you go. Every time you buy something for the business, photograph the receipt and add it to your MTD software immediately. Takes two minutes per transaction. Works well for people who make frequent small purchases.
2. Weekly batch processing. Collect receipts through the week, then spend twenty minutes each Friday uploading and categorising them. Works well for most sole traders and landlords with moderate transaction volumes.
3. Bank import plus weekly review. Let your bank feed pull transactions automatically, then review and categorise once a week. Works well if most of your business spending goes through a dedicated business bank account.

If your records from Q1 were messy, read this honest look at fixing messy expense records before Q2 gets away from you.

Your Q2 Week 1 checklist at a glance

• Confirm Q1 quarterly update was accepted by HMRC
• Reconcile Q1 closing balances against bank statements
• Set up separate income streams for each income type (self-employment, property)
• Review and correct any miscategorised Q1 expenses
• Start logging Q2 income from 6 July onwards
• Set up your weekly bank reconciliation routine
• Make sure you have a system for saving receipts digitally
• Note the 7 August Q1 deadline if not yet submitted
• Note the 31 July payment on account date for cash flow planning

The bigger picture

Q2 runs for exactly three months. That is twelve weekly reconciliation checks if you build the habit now. Twelve ten-minute slots is two hours of bookkeeping spread across the whole quarter. That is a very different proposition from spending a day in late September trying to remember what happened in July.

The MTD system is built around regular, accurate record-keeping - not a one-off panic before each deadline. The broader Q2 planning guide covers more of the strategic side, but the most important thing you can do right now is just start. Record today's income. Categorise today's expenses. That is all Week 1 requires.