MTD ITSA quarterly update: how to submit your first return

Published Tuesday 28 July 2026

Table of contents

• What is an MTD ITSA quarterly update?
• Who needs to send quarterly updates?
• When are the MTD ITSA quarterly update deadlines?
• What information goes in a quarterly update?
• How to submit your first MTD ITSA quarterly update
• What happens if you miss a deadline or make a mistake?
• Choosing MTD-compatible software
• Stay ready for Making Tax Digital with Xero
• FAQs on MTD ITSA quarterly updates

Key takeaways

• MTD ITSA replaces one annual Self Assessment with a quarterly update every three months plus a year-end return, for sole traders and landlords over the income threshold.
• Your first quarterly update for 2026/27 covers 6 April to 5 July 2026 and is due 7 August 2026.
• A quarterly update is a running total of your income and expenses by category, sent from MTD-compatible software, not a list of every transaction.
• No penalty points apply for late quarterly updates in the 2026/27 tax year, though you still need to send them.

What is an MTD ITSA quarterly update?

A making tax digital income tax self assessment (MTD ITSA) quarterly update is a short summary of your business income and expenses that you send to HM Revenue and Customs (HMRC) every three months from MTD-compatible software. It's part of Making Tax Digital for Income Tax, and it changes how you report as a sole trader or landlord.

Typically, you report once a year through Self Assessment. Under Making Tax Digital income tax rules, you send four updates across the year and then confirm your final figures afterwards. You don't need to be an accountant to do this, and you don't work out your tax bill each quarter.

Each update reports cumulative category totals, so every update covers the tax year so far rather than just the latest three months. You send a separate update for each self-employment and each property business you run.

The shift sounds bigger than it feels in practice. Once your records are digital and your software is connected, most of a quarterly update is already prepared for you. Your job is to check the totals look right and press send, rather than build a return from scratch four times a year.

Who needs to send quarterly updates?

Making Tax Digital for Income Tax arrives in stages, based on your qualifying income. You'll be brought in on one of three dates, depending on how much you earn.

• over £50,000 qualifying income: from 6 April 2026
• over £30,000 qualifying income: from April 2027
• over £20,000 qualifying income: from April 2028

Qualifying income is your combined gross income, or turnover, from self-employment and property before you take off any expenses. If you have income from both, you add the two together to check whether you're over a threshold.

That gross figure matters because it's higher than the profit you're used to seeing. A landlord earning £30,000 in rent and £25,000 from freelance work has £55,000 of qualifying income, so they fall into the first stage even though their profit after costs is lower.

You can also sign up voluntarily before your date if you'd rather start early and get used to the routine. This guide applies to sole traders, freelancers, consultants and landlords who work without employees or payroll.

When are the MTD ITSA quarterly update deadlines?

Your quarterly update deadlines follow set periods across the tax year, and each one falls on the seventh day of the month after the period ends. These are the standard MTD ITSA deadlines using tax-year quarters:

• 6 April to 5 July (Q1): due 7 August
• 6 April to 5 October (Q1 – Q2): due 7 November
• 6 April to 5 January (Q1 – Q3): due 7 February
• 6 April to 5 April (Q1 – Q4): due 7 May the following year

This means that for 2026/27, your first quarterly update covers 6 April to 5 July 2026 and is due by 7 August 2026. You send it to HMRC any time from the end of the period up to that deadline, so there's a comfortable window to get it right.

If you'd prefer, you can elect to use calendar quarters instead. For example, your first quarter would be 1 January to 31 March, and would be due on 7 May. The dates you report against are the main practical difference.

What information goes in a quarterly update?

A quarterly update is lighter than many people expect. You report cumulative category totals of your income and expenses, not a line-by-line list of every transaction.

Your MTD-compatible software groups your figures into standard categories, then adds them up from the start of the tax year. Because each update is cumulative, later updates include and refine the figures from earlier ones.

You send one update for each business. So if you're a landlord who also does consultancy work, you send a separate update for the property income and another for the self-employment income. Keeping digital records of your income and expenses through the quarter is what makes each update quick to prepare.

Digital records simply mean your figures live in software rather than on paper or in a spreadsheet you type up by hand. When you record income and costs as they happen, the category totals build up on their own, and there's little to do when the deadline arrives.

How to submit your first MTD ITSA quarterly update

Your first submission is mostly about getting set up once, then following a simple routine each quarter. Work through these steps in order to send your first quarterly update to HMRC:

1. Check whether MTD ITSA applies to you by comparing your qualifying income against the current threshold.
2. Sign up for Making Tax Digital for Income Tax with HMRC, or confirm you're already enrolled.
3. Choose MTD-compatible software and connect it to your business finances.
4. Keep digital records of your income and expenses as you go through the quarter.
5. Review your category totals for the period so the figures look right.
6. Submit the quarterly update to HMRC directly from your software before the deadline.
7. Repeat each quarter, then finalise your figures with your year-end return.

Once you've done the setup in steps one to three, later quarters are simply a case of checking your totals and sending the update. The routine gets faster each time.

What happens if you miss a deadline or make a mistake?

Getting this wrong is a common worry, so here's the reassuring part; HMRC won't charge late-submission penalty points for quarterly updates during the 2026/27 tax year, although you're still expected to send each update.

Small errors tend to sort themselves out too. Because updates are cumulative, a figure you correct in a later update flows through and updates the running totals automatically. You don't need to reopen a past quarter to fix a minor slip.

Your final figures are confirmed at the year end, not each quarter. After the tax year ends, you submit a year-end return that pulls everything together and confirms your final position, with tax due by 31 January after the tax year. You can read HMRC's overview of the full process in the Making Tax Digital for Income Tax guidance.

Choosing MTD-compatible software

The software you pick does the heavy lifting, so it's worth choosing something that fits how you work. You need MTD-compatible software to keep digital records and send updates, and HMRC keeps a list of recognised options. Look for software that:

• appears on HMRC's recognised list for Making Tax Digital for Income Tax
• connects to your bank so income and expenses flow in automatically
• sorts your figures into the right income and expense categories
• sends quarterly updates and your year-end return to HMRC directly

You can check which products are approved on HMRC's guidance to choose software that's compatible with Making Tax Digital for Income Tax.

Stay ready for Making Tax Digital with Xero

Making Tax Digital is easier when your records stay tidy all year, so your quarterly update is ready when the deadline comes around. Xero keeps your income and expenses in one place, sorts them into categories, and lets you send updates to HMRC without switching tools. That means less last-minute admin and more confidence that your figures add up.

Want to try MTD-ready accounting software? Get one month free

FAQs on MTD ITSA quarterly updates

Here are quick answers to the questions sole traders and landlords ask most about MTD ITSA quarterly updates to HMRC.

Do quarterly updates replace the Self Assessment tax return?

They replace the once-a-year reporting habit, but not the final step. You send four quarterly updates and then a year-end return that confirms your figures.

Can I still send quarterly updates if my income is under £50,000?

Yes. You can sign up voluntarily before your mandatory date to get used to the process ahead of time.

What if I have both self-employment and rental income?

You keep them separate and send a quarterly update for each one. Your qualifying income still counts both sources combined when checking the threshold.

Do I have to pay tax every quarter now?

No. Quarterly updates report your income and expenses; you don't pay tax with them. Your tax stays due by 31 January after the tax year.