How Quarterly Updates to HMRC Work Under MTD for Income Tax

If you let property in the UK, Making Tax Digital for Income Tax (often shortened to MTD for ITSA, or just MTD IT) changes how you report your rental figures to HMRC. Instead of one Self Assessment tax return after the year ends, you send four quarterly updates through compatible software, plus a final declaration that wraps everything up. It sounds like more work, and in raw count it is, but each quarterly update is deliberately lightweight. This guide walks through exactly what each update period covers, what data goes in, when the final declaration happens, and the deadlines you need to keep.

Who this applies to, and from when

MTD for Income Tax is being phased in by income level. The thresholds are based on your qualifying income — broadly your gross income from self-employment and property before deducting expenses, not your profit.

• From 6 April 2026: sole traders and landlords with qualifying income above £50,000.
• From 6 April 2027: those with qualifying income above £30,000.
• From 6 April 2028: the government has announced an intention to bring in those above £20,000.

HMRC looks at the income reported on a previous tax return to decide whether you're in. For the April 2026 start, it's the figures from the 2024/25 return (the one due by 31 January 2026) that determine whether you cross the £50,000 line. If your gross rents and any self-employed turnover together exceed the threshold, you're mandated — and importantly, the threshold combines property and trading income, so a landlord who also does a bit of freelance work may be caught sooner than expected.

When it doesn't apply: if your qualifying income sits below the current threshold you're not yet mandated, though you can volunteer early. Some taxpayers can also apply for an exemption (for example on grounds of digital exclusion, such as age, disability or remoteness from reliable internet), and certain trustees and personal representatives fall outside the regime. Income taxed only through PAYE, savings interest and dividends doesn't count towards the qualifying-income test.

The four update periods

The tax year is divided into four standard quarters. Each quarter has a fixed start and end date, and a filing deadline that falls roughly a month after the quarter ends. The quarterly deadlines are the same every year, which makes them easy to diarise.

Quarter	Period covered	Filing deadline
Q1	6 April – 5 July	7 August
Q2	6 April – 5 October	7 November
Q3	6 April – 5 January	7 February
Q4	6 April – 5 April	7 May

Two things often surprise people here. First, the updates are cumulative by default: each quarterly update covers the year-to-date totals from 6 April, not just the three months since the last one. So your Q3 update restates income and expenses for the whole period from 6 April to 5 January. This is helpful — if you miscategorised something in an earlier quarter, the correction simply flows through the next update rather than needing a separate amendment.

Second, there's a calendar-quarter option. If you prefer your quarters to line up neatly with calendar months, you can elect to use period end dates of 30 June, 30 September, 31 December and 31 March instead of the 5th-of-the-month dates. The filing deadlines stay the same (7 August, 7 November, 7 February, 7 May), and the election is made in your software. This can make life easier if your bookkeeping or letting-agent statements run to month-end.

What data each quarterly update contains

A quarterly update is a summary of your property income and expenses for the period, broken down into HMRC's standard categories. You are not sending invoices, receipts or a tax calculation — just totals per category. For UK property, you'll typically report figures such as:

• Rental income — total rents received in the period.
• Premiums for the grant of a lease and other property income, where relevant.
• Rent, rates, insurance and ground rents — costs of running the let.
• Property repairs and maintenance — but not capital improvements.
• Loan interest and other financial costs (entered here, with the basic-rate restriction for residential landlords applied later at the calculation stage, not in the quarterly update itself).
• Legal, management and professional fees — including letting-agent commission.
• Costs of services provided, including wages.
• Other allowable property expenses.

If you let property both in the UK and overseas, those are treated as separate businesses and need separate quarterly updates. The same applies if you have a furnished holiday let history, self-employment alongside your lettings, or jointly owned property — each distinct income source has its own set of four updates running in parallel. A landlord with a UK portfolio and one Spanish apartment, for instance, files eight quarterly updates a year, not four.

The quarterly figures are deliberately a snapshot, not a finished accounting position. You do not need to apply accruals, capital allowances, the property income allowance, or private-use adjustments at this stage. Those refinements happen at the end of the year. HMRC uses the cumulative quarterly data to generate an estimated tax position, which your software can show you — handy for budgeting, but it is only an estimate and shouldn't be treated as your final bill.

Nil updates and quiet quarters

If nothing happened in a quarter — say a property stood empty between tenancies — you still need to make a quarterly update, but you can submit a nil update reflecting no income and no expenses. There's also a "no-activity" or quarterly declaration route in some software for genuinely dormant property businesses. The point is that the deadline doesn't disappear just because the quarter was quiet.

The final declaration

The four quarterly updates do not, on their own, settle your tax. After the tax year ends, you make a final declaration — the modern equivalent of submitting and confirming your Self Assessment return. This is where the year actually gets finalised.

At the final declaration stage you:

1. Confirm or adjust the cumulative property figures from your quarterly updates.
2. Add any accounting and tax adjustments — capital allowances, the £1,000 property income allowance if you're claiming it, the residential finance-cost restriction, balancing charges, private-use proportions and so on.
3. Bring in all your other taxable income that wasn't in the quarterly updates — employment and PAYE, pensions, savings interest, dividends, capital gains and any reliefs or allowances such as the Marriage Allowance or Gift Aid.
4. Declare that the information is correct and complete, which crystallises your final tax liability for the year.

The final declaration deadline is 31 January following the end of the tax year — the same date Self Assessment has always used. So for the 2026/27 tax year, the final declaration is due by 31 January 2028. Crucially, your payment dates are unchanged too: the balancing payment for the year and your first payment on account are both due by 31 January, with the second payment on account due by 31 July. MTD changes how you report during the year; it does not change when you pay.

A worked example of the cycle

Imagine a landlord with two UK buy-to-lets, mandated from April 2026. Their 2026/27 cycle looks like this:

• By 7 August 2026: Q1 update with year-to-date rent and costs for 6 April–5 July 2026.
• By 7 November 2026: Q2 cumulative update through 5 October.
• By 7 February 2027: Q3 cumulative update through 5 January.
• By 7 May 2027: Q4 cumulative update covering the full year to 5 April 2027.
• By 31 January 2028: final declaration, adding the finance-cost restriction, any other income, and confirming the year — with the balancing payment due the same day.

That's five submissions for the property business across the cycle, but only the last one involves real tax decisions.

Penalties for missing deadlines

MTD introduces a points-based system for late quarterly updates. Each missed submission deadline earns a penalty point; once you reach the threshold for your filing frequency (four points for quarterly filers), a £200 penalty applies, and a further £200 for each subsequent late submission while you remain at the threshold. Points expire after a period of compliance. Late payment is handled separately, with charges that increase the longer the tax stays unpaid, plus interest. Keeping to the 7 August / 7 November / 7 February / 7 May rhythm is the simplest way to avoid points building up.

Frequently asked questions

Do I still file a Self Assessment return?

Not in the old form. The final declaration replaces the traditional return for the income within MTD. You'll do everything through compatible software rather than the old online return.

Can I correct a mistake from an earlier quarter?

Yes — because the standard updates are cumulative, you simply enter the corrected year-to-date totals in your next quarterly update and the difference is picked up automatically.

What if I jointly own a property with my spouse?

Each owner reports their own share of income and expenses through their own MTD submissions. Jointly let property has some easements (for example you may not need to report expenses quarterly in every case), but each individual still files their own updates and final declaration.

Does going under the threshold later get me out?

Once you're in MTD you generally stay in, even if income later dips, unless you qualify for an exemption. Check the current HMRC guidance rather than assuming a temporary drop releases you.

Which software do I need?

You must use HMRC-recognised MTD-compatible software (or bridging software linked to spreadsheets) to keep digital records and send updates. HMRC publishes a list of compatible products; tools built for landlords, like Filesy, handle the categorisation and submission for you.

This article is general information from the Filesy editorial team (NexoraOS) and is not professional, financial or legal advice. Tax rules and MTD timetables can change — check current gov.uk guidance or speak to a qualified accountant about your own circumstances.