MTD ITSA First Quarterly Update Due 7 August 2026: 19 Days to Submit Q1

Making Tax Digital for Income Tax Self Assessment (MTD ITSA) is no longer a future requirement — it is live. The first quarterly update for the 2026–27 tax year, covering income and expenses from 6 April to 5 July 2026, must reach HMRC by 7 August 2026. ICAEW and HMRC both flagged this date in July guidance as the milestone where paper-based habits finally collide with mandatory digital reporting.

Roughly 864,000 sole traders and landlords with combined self-employment and UK property income above £50,000 in 2024–25 are in scope. If you have not confirmed MTD registration, reconciled Q1 bank feeds, or tested compatible software, the remaining days before 7 August should be treated as a hard compliance deadline — not a soft reminder.

Quarterly updates summarise business income and allowable expenses for each three-month period. They are not full tax returns — but they must be submitted through MTD-compatible software that maintains digital records of every in-scope transaction.

Unlike MTD VAT, ITSA quarterly updates are cumulative. Each submission overwrites the previous one for the year to date. If you use bridging software or manual summaries, ensure Q1 figures remain included when you later extend the period to Q2 — otherwise HMRC receives an incomplete year-to-date picture.

Self-employment and UK property income are reported separately when you have both. Foreign property, employment, dividends, and other income sources stay outside MTD ITSA quarterly updates but may still appear on your year-end declaration.

You must be signed up for MTD ITSA through HMRC and have linked compatible software before submitting. Registration can take several days — agents can enrol clients from 1 April 2026, but many sole traders are still completing this step in July.

Digital records must exist for every transaction: income received, expenses paid, and adjustments. Disconnected spreadsheets only meet the standard when bridged through software that creates, stores, copies, and corrects records in a format HMRC accepts.

HMRC's online checker confirms whether your 2024–25 gross self-employment and property income crossed the £50,000 threshold. Lower thresholds of £30,000 from April 2027 and £20,000 from April 2028 will expand MTD ITSA scope over the next two years.

For 2026–27 only, HMRC will not issue penalty points for late quarterly submissions — but you must still file all four updates before your final declaration. Missing Q1 creates reconciliation problems later even without immediate penalty points.

From 2027–28 onward, late quarterly or year-end submissions earn penalty points: £200 when you reach four points, plus £200 for each further miss. Late payment penalties tier from 3% (days 16–30 in 2026–27) upward, with interest accruing from day one.

Quarterly updates do not replace tax payments. Balancing payments and payments on account remain due on the usual Self Assessment schedule — 31 January following the tax year. The July 2026 payment on account deadline (31 July) runs in parallel for many in-scope taxpayers.

Confirm MTD ITSA registration today. Reconcile April–June bank feeds, separate business from personal transactions, and run a test submission through your software before the period closes on 5 July.

Build an internal calendar for all four 2026–27 deadlines: 7 August, 7 November, 7 February, and 7 May. Remember cumulative reporting — each update replaces the last.

FinnAccountings connects UK bank feeds, categorises MTD ITSA transactions automatically, and sends reminders at 30, 14, and 7 days before each quarterly deadline — start a free trial to prepare your first update before 7 August.