Making Tax Digital for Income Tax What Sole Traders and Landlords Need to Do Before 7 November 2026

A practical guide to digital records quarterly updates and the next phase from April 2027

Jassim Financial Solutions Ltd  |  Updated 6 October 2026

Making Tax Digital for Income Tax is now a legal requirement for many sole traders and landlords. If your total qualifying income from self-employment and property was more than £50,000, you may already be required to keep digital records and send quarterly updates to HMRC for the 2026/27 tax year.

For most people using standard update periods, the second quarterly update covers records from 6 April to 5 October 2026 and must be sent by 7 November 2026. Those using calendar update periods report from 1 April to 30 September and have the same deadline. The update is submitted through compatible software and is a summary of income and expenses, not a separate tax return.

The next expansion is also approaching. Sole traders and landlords with qualifying income over £30,000 are due to enter Making Tax Digital for Income Tax from 6 April 2027. Preparing digital records before the start date can prevent a rushed software change and make quarterly reporting easier to manage.

Preparing for Making Tax Digital for Income Tax early can make digital record-keeping and quarterly reporting easier to manage.

Who must use Making Tax Digital for Income Tax

You generally need to use Making Tax Digital for Income Tax from 6 April 2026 if all of the following apply:

• You are an individual registered for Self Assessment.
• You receive income from self-employment, UK property or foreign property.
• Your total qualifying income from those sources was more than £50,000.

The test uses gross qualifying income before expenses. If you have both trading and property income, the relevant amounts are combined. Salary, pensions, dividends and savings income are not included when measuring the MTD qualifying-income threshold, although they may still need to be reported when your tax return is completed.

The income threshold reduces to more than £30,000 from 6 April 2027 and more than £20,000 from 6 April 2028 under the current timetable. The rules can be more complicated where income sources have started or ceased, where a return has not yet been filed, or where HMRC holds outdated information.

What the 7 November 2026 deadline covers

Quarterly updates are generated from the digital records held in your compatible software. Each update contains totals for the income and expense categories used for your self-employment or property business. HMRC does not receive copies of every receipt, invoice or individual transaction.

Update method	Records covered	Submission deadline
Standard periods	6 April to 5 October 2026	7 November 2026
Calendar periods	1 April to 30 September 2026	7 November 2026

The second update is cumulative. It reports totals from the start of the tax year to the end of the relevant update period, rather than reporting only the latest three months. This means corrections made in your digital records can flow into the next update without resending each earlier submission.

If you have more than one self-employment business or separate property businesses, quarterly information may be required for each source. A nil period does not automatically remove the obligation; an update may still be required to confirm that there was no income or expenditure.

Quarterly updates do not replace your tax return

A quarterly update is a summary based on the records available at that point. You do not normally make all accounting and tax adjustments before sending it. After the end of the tax year, the figures must still be reviewed, adjusted where necessary and combined with other reportable income before the tax return is submitted.

The normal Self Assessment filing and payment deadline remains 31 January following the end of the tax year. For 2026/27, that will generally mean filing the final return and paying the tax due by 31 January 2028. Quarterly updates therefore change the record-keeping and reporting process; they do not create four separate tax returns or four automatic tax-payment dates.

What records need to be kept digitally

Digital records should be created and maintained for business and property income and expenses. Depending on your activity, this may include:

• Sales invoices, takings and other trading income.
• Purchase invoices and allowable business expenses.
• Rental income, letting-agent statements and property expenses.
• Bank transactions connected with the business or property activity.
• Adjustments and corrections made to the underlying records.

A spreadsheet can form part of a digital record-keeping system, but the process must use software that can communicate with HMRC. Where information moves between products, digital links may be needed so that figures are not repeatedly copied and pasted by hand. The appropriate setup depends on the software and the complexity of the records.

Common MTD problems to identify now

The wrong income threshold has been used

The threshold is based on gross qualifying income, not taxable profit. A landlord or sole trader can therefore be within MTD even where expenses reduce the final profit substantially.

Property and trading income have not been combined

Someone may be below the threshold when each activity is considered separately but above it when total self-employment and property income are combined.

Software has been chosen without checking the full workflow

Compatible software needs to suit the records you actually maintain. A landlord with jointly owned property, a sole trader with several income sources or a business already using bookkeeping software may need a different setup from someone starting digital records for the first time.

Transactions are recorded only before a deadline

MTD works best when bookkeeping is maintained throughout the quarter. Leaving bank transactions, invoices and property statements until the submission week increases the chance of missing records or using incomplete categories.

Quarterly estimates are treated as final tax figures

The estimate available after an update can help with planning, but it is not necessarily the final liability. Year-end adjustments, reliefs and other income can change the amount due.

What about penalties in the first year

HMRC has said it will not apply penalty points for late quarterly updates during the 2026/27 tax year. However, required updates still need to be sent before the tax return can be completed. Penalties can still apply to a late tax return or late tax payment.

From later years, the points-based system is expected to apply to missed quarterly deadlines. Under the current rules, a person who reaches the applicable points threshold may receive a £200 penalty. Relying on the first-year easement instead of establishing a workable process is unlikely to be a sensible long-term approach.

Preparing for the April 2027 expansion

If your qualifying income is over £30,000 but not more than £50,000, the current timetable brings you into MTD from 6 April 2027. The months before April provide an opportunity to review the previous tax return, confirm the income sources HMRC holds, choose compatible software and move record keeping onto a regular schedule.

A practical preparation plan is to complete the following before the new tax year:

• Confirm whether your gross qualifying income exceeds the threshold.
• List each self-employment and property income source.
• Decide who will maintain the digital records and how often they will be updated.
• Select compatible software that fits the bookkeeping process.
• Bring bank reconciliations and outstanding records up to date.
• Agree responsibilities with your accountant before the first quarterly period begins.

How Jassim Financial Solutions can help

Jassim Financial Solutions can support sole traders and landlords with MTD readiness, compatible accounting software, digital bookkeeping and quarterly-update submissions. We can also review whether the income threshold applies, organise separate income sources and maintain the records needed for the year-end tax return.

If you are already within Making Tax Digital for Income Tax and need help with the 7 November update, or expect to join from April 2027, contact Jassim Financial Solutions to discuss a practical ongoing service.

This article provides general information only. Making Tax Digital obligations and exemptions depend on individual circumstances, income sources and HMRC records. Personalised advice should be obtained before acting.

Jassim Financial Solutions provides practical Making Tax Digital for Income Tax support, including bookkeeping, software setup and quarterly updates.

Frequently asked questions

Is the £50000 threshold based on profit

No. The threshold is based on total gross qualifying income from self-employment and property before expenses.

Does PAYE salary count towards the MTD threshold

PAYE salary is not included in qualifying income for this threshold. Self-employment and property income are the relevant sources.

Do quarterly updates mean tax must be paid every quarter

No. Quarterly updates provide income and expense summaries. The usual Self Assessment payment timetable continues unless another payment obligation applies.

Can an accountant send the updates

Yes. An authorised agent can support the sign-up process and submit quarterly updates using compatible software.

Can someone be exempt from MTD

Exemptions may be available in limited circumstances, including digital exclusion. An exemption should not be assumed; the facts need to be considered and HMRC may need to approve the application.