Quarterly MTD Returns: What Sole Traders Need to Submit and When

Sole traders within Making Tax Digital for Income Tax must submit four quarterly updates a year, due on 7 August, 7 November, 7 February and 7 May, followed by a final declaration by 31 January after the tax year ends. Making Tax Digital self-employed 2026 rules took effect on 6 April 2026 for anyone with qualifying income above £50,000, and the first quarterly update under the new regime fell due on 7 August 2026. The change is procedural rather than a new tax, but the penalty regime behind it is real and the record-keeping standard is higher than most sole traders are used to. Blue Tick Accountants, a Guildford-based UK tax advisory and accountancy practice, works with self-employed clients across the country to get their bookkeeping and software ready before a deadline is missed. This guide sets out who is in scope, exactly what each quarterly update contains, when every submission is due, and how to prepare if your income sits close to the threshold.

Key Takeaways

• Sole traders with qualifying income above £50,000 in the 2024/25 tax year joined Making Tax Digital for Income Tax on 6 April 2026.
• MTD for Income Tax requires four quarterly updates per tax year, due on 7 August, 7 November, 7 February and 7 May.
• Quarterly updates report cumulative totals of business income and expenses by category, not a calculated tax figure.
• The final declaration replaces the self-assessment tax return and remains due by 31 January following the end of the tax year.
• Qualifying income is gross turnover before expenses, and self-employment and property income are added together to test the £50,000 threshold.
• The threshold falls to £30,000 from April 2027 and to £20,000 from April 2028, bringing most sole traders into the regime.

Who is in scope for Making Tax Digital in 2026/27?

A sole trader is in scope for MTD for Income Tax in 2026/27 if their qualifying income from self-employment and property exceeded £50,000 in the 2024/25 tax year. HMRC tests qualifying income using the figures on the last submitted self-assessment return, so the 2024/25 return filed by 31 January 2026 determined mandation for the tax year beginning 6 April 2026.

Two points catch people out. First, qualifying income means gross income before deducting any allowable expenses, so a sole trader turning over £62,000 with £20,000 of costs is in scope despite a taxable profit of only £42,000. Second, self-employment and property income are combined. A tradesperson with £38,000 of turnover and £15,000 of rent from a let flat has qualifying income of £53,000 and is mandated.

Once in the regime, you stay in it even if income later dips, unless income falls below the threshold for three consecutive years. Sole traders below £50,000 continue filing an ordinary self-assessment return for now, but the £30,000 threshold from April 2027 will sweep in a far larger group. For a full overview of the transition, see our guide to Making Tax Digital for the self-employed.

What does a quarterly update actually contain?

A quarterly update is a cumulative summary of business income and expenses for the tax year to date, categorised using HMRC's standard headings, submitted from MTD-compatible software. It is not a tax calculation, it does not create a payment obligation, and it does not have to be perfect.

Each update reports totals under the categories a sole trader already recognises from the self-assessment pages: turnover and other business income, then cost of goods, wages, premises costs, motor and travel, professional fees, and so on. Property income is reported separately from trading income, so a sole trader who also lets a flat submits two sets of updates.

Because updates are cumulative, each one restates the year to date rather than reporting a standalone three-month block. An error in the first quarter is corrected simply by submitting accurate cumulative figures in the second. Accounting adjustments, capital allowances, private use restrictions and reliefs are dealt with later at the final declaration stage, not quarter by quarter.

When are the quarterly returns due for self-employed taxpayers?

Quarterly returns for self-employed taxpayers cover periods ending 5 July, 5 October, 5 January and 5 April, with each submission due one month and two days after the quarter end: 7 August, 7 November, 7 February and 7 May.

For the 2026/27 tax year that means:

1. Quarter to 5 July 2026, due 7 August 2026
2. Quarter to 5 October 2026, due 7 November 2026
3. Quarter to 5 January 2027, due 7 February 2027
4. Quarter to 5 April 2027, due 7 May 2027

Sole traders may elect for calendar quarterly periods instead, ending 30 June, 30 September, 31 December and 31 March, which suits anyone whose bookkeeping already runs to month ends. The deadlines stay the same. The election must be made in software before the first update of the tax year is filed and applies to all of that business's updates for the year.

How does the final declaration replace the tax return?

The final declaration replaces the self-assessment tax return for sole traders inside MTD for Income Tax and is due by 31 January following the end of the tax year, so 31 January 2028 for the 2026/27 tax year. Payment deadlines are unchanged: balancing payment on 31 January, payments on account on 31 January and 31 July.

The final declaration is where the year is actually finalised. Accounting adjustments, capital allowances, the trading allowance, private use adjustments and any non-business income such as employment, dividends, savings interest or pension contributions are all brought in at this stage. Nothing about MTD removes the need to report that wider income.

Worked example. Priya is a self-employed graphic designer with turnover of £68,000 in 2024/25, so she was mandated from 6 April 2026. Across 2026/27 she files four quarterly updates from her bookkeeping software, reporting cumulative turnover of £71,400 and cumulative expenses of £18,900 by the fourth update. At the final declaration she claims £4,200 of capital allowances on a new workstation and restricts her motor costs by 30% for private use, adding £1,860 back. Her final taxable profit is £50,160, and her balancing payment falls due on 31 January 2028.

How should a sole trader prepare before the next deadline?

Preparation comes down to three things: MTD-compatible software, digital records kept from source, and a routine that captures transactions monthly rather than annually. Spreadsheets alone are not sufficient unless linked to HMRC through bridging software.

Digital record-keeping means each sale and each expense is recorded individually in software, with the date, amount and category, and with the digital link preserved from record to submission. Retyping a bank summary once a quarter does not meet the standard set out in HMRC guidance.

Sole traders whose income sits between £30,000 and £50,000 should treat 2026/27 as a dry run, because mandation arrives for them on 6 April 2027 and the practical adjustment is easier made in advance than under deadline pressure. HMRC has applied a soft landing to the first twelve months, so late quarterly updates in 2026/27 attract no penalty points. From 2027/28 they attract points under HMRC's points-based regime, with a £200 penalty once four points are reached. The final declaration carries points from the outset, and late payment penalties apply in full throughout.

Frequently Asked Questions

Do I still need to file a self-assessment tax return under MTD?

No. Sole traders inside Making Tax Digital for Income Tax file four quarterly updates plus a final declaration instead of a self-assessment tax return. The final declaration is due by 31 January following the end of the tax year and covers all income sources, including employment, dividends and savings interest, not just self-employment profits.

Does a quarterly update mean I pay tax every quarter?

No. Quarterly updates under MTD for Income Tax are information submissions only and create no payment obligation. Income tax payment dates are unchanged: payments on account fall due on 31 January and 31 July, with any balancing payment due on 31 January after the tax year ends.

What happens if my income falls below £50,000 after I have joined MTD?

You remain within MTD for Income Tax. HMRC only allows exit where qualifying income falls below the threshold for three consecutive tax years, and you must apply rather than simply stopping submissions. Continuing to file quarterly updates protects you from points-based late submission penalties in the meantime.

Can I still use a spreadsheet for my bookkeeping?

Yes, provided the spreadsheet is connected to HMRC through bridging software that preserves a digital link from the underlying records to the submission. Manually retyping totals into a submission portal does not satisfy the digital record-keeping requirement set out in HMRC guidance, and can expose you to record-keeping penalties.

I am both self-employed and a landlord. Do I file separate updates?

Yes. Trading income and property income are reported as separate income sources under MTD for Income Tax, so you submit a set of quarterly updates for each. Both sources are added together when testing your qualifying income against the £50,000 threshold, even though they are reported separately.

How Blue Tick Can Help

Blue Tick Accountants sets self-employed clients up on MTD-compatible software, reviews qualifying income against the current threshold, and takes over the quarterly update cycle so the deadlines are met without you tracking them. Where records are currently kept on paper or in an unlinked spreadsheet, the practice migrates them properly rather than patching them. Head to our website and book a meeting now.

Conclusion

Four dates now govern the self-employed tax year: 7 August, 7 November, 7 February and 7 May, with the final declaration on 31 January. The quarterly updates themselves are light, but they depend on bookkeeping being done monthly rather than in a January scramble, and that is the real change. Check your 2024/25 gross income against the £50,000 threshold, confirm whether you are mandated, and get compliant software in place well before the next quarter closes.

About the Author

This guide was written by Leon, founder of Blue Tick Accountants, a Guildford-based UK tax advisory and accountancy practice that helps self-employed people, landlords and limited company owners across the UK. It was last reviewed for the 2026/27 tax year.

This article is intended for general informational purposes only and does not constitute tax, legal, or financial advice. Tax rules are subject to change and their application will depend on your individual circumstances. You should always seek advice from a qualified professional before taking action. Blue Tick Accountants accepts no liability for decisions made on the basis of this content.

Related reading: Best Accounting Software for Self-Employed People Under MTD.

Related reading: MTD ITSA and Landlords with a Self-Employed Business: How the Rules Combine.