Making Tax Digital for Income Tax entered its first mandatory year on 6 April 2026. For people within the new system, the second quarterly update is due by 7 November 2026.
That deadline may sound straightforward, but several points can cause confusion. The update is cumulative. It is not a second tax return. HMRC does not receive copies of every invoice or receipt. Tax adjustments are generally not required at this stage. You may also need to send more than one update if you have several businesses.
This guide explains who is affected, which period the 7 November update covers, what the software sends, what to check before submitting and what happens if the deadline is missed.
What is an MTD Income Tax quarterly update?
A quarterly update is a summary of income and expense totals created from the digital records for a self-employment or property business.
Compatible software adds together the transactions recorded for each relevant business and sends the resulting category totals to HMRC. The update helps keep the records current and can support an estimate of the tax position during the year.
It is important to understand what the update is not.
It is not:
- A complete Self Assessment tax return
- A final calculation of taxable profit
- A requirement to upload every invoice or receipt
- A substitute for year-end adjustments
- A payment deadline for the tax shown by the software estimate
The quarterly figures are based on the digital records available at that point. Capital allowances, private-use adjustments, loss claims and other tax adjustments are normally dealt with later, before the final tax return is submitted through compatible software.
Who should be preparing the 7 November 2026 update?
The first mandatory phase of MTD Income Tax applies from 6 April 2026 to an individual who:
- Is registered for Self Assessment
- Has qualifying income from self-employment, property, or both
- Had total qualifying income of more than £50,000 for 2024/25
- Is not covered by an exemption
Qualifying income means gross self-employment and property income before expenses. It is not the same as profit or taxable income.
HMRC began writing to and signing up people whose records indicated that they were required to use MTD. However, the taxpayer remains responsible for checking the position. Not receiving a letter does not necessarily mean that MTD does not apply.
The threshold falls in later phases:
- More than £30,000 of qualifying income, generally from 6 April 2027 based on the 2025/26 return
- More than £20,000 of qualifying income, generally from 6 April 2028 based on the 2026/27 return
The separate Week 5 guide, MTD Income Tax: What Counts as Qualifying Income?, explains how the threshold is calculated.
Which period does the 7 November 2026 update cover?
The second quarterly update is cumulative. It covers the tax year to date, not only the transactions since the first update.
Standard update periods
Where standard periods are used, the second update covers:
6 April 2026 to 5 October 2026
The deadline is 7 November 2026.
The software should therefore send cumulative income and expense totals for the first six months of the tax year.
Calendar update periods
Where calendar periods were selected before the first update, the second update covers:
1 April 2026 to 30 September 2026
The deadline is still 7 November 2026.
Calendar periods are intended to align with businesses that keep records from 1 April to 31 March. The software defaults to standard periods. A calendar-period election needed to be made before the first quarterly update, and the basis cannot then be changed for the rest of the tax year.
Why cumulative reporting matters
Suppose a sole trader using standard periods recorded:
- Income of £24,000 and expenses of £9,000 from 6 April to 5 July
- A further £21,000 of income and £8,000 of expenses from 6 July to 5 October
The second update should show cumulative totals of £45,000 income and £17,000 expenses. It should not report only the later £21,000 and £8,000 amounts.
Compatible software should calculate this automatically. The business should still check that the period and totals are sensible before approving the submission.
What information is sent to HMRC?
The quarterly update contains totals for the income and expense categories used in the digital records. The categories broadly follow those used for Self Assessment.
Depending on the business and the software, the update may contain totals for matters such as:
- Turnover or rental income
- Cost of goods bought for resale
- Wages and staff costs
- Car, van and travel costs
- Premises costs
- Repairs and maintenance
- Accountancy, legal and professional fees
- Interest and finance costs
- Telephone, internet, stationery and other office costs
- Advertising and marketing
- Other allowable business expenses recorded during the period
HMRC does not receive the detail of each individual invoice or receipt through the quarterly update. Those documents and transaction-level records must still be retained as supporting evidence.
Do accounting and tax adjustments have to be made by 7 November?
HMRC states that accounting and tax adjustments do not have to be completed before a quarterly update is sent.
That means the 7 November submission can be based on the digital records as they stand, provided the records are complete and reasonable for the period.
Items that may be dealt with later include:
- Capital allowances
- Private-use adjustments
- Stock adjustments
- Accruals and prepayments, where relevant
- Bad debt reviews
- Use of home calculations
- Loss claims
- Property finance cost restrictions
- Rent a Room relief decisions
- Other claims and elections
This does not mean accuracy is unimportant. A business should correct obvious omissions, duplicates and categorisation errors before submission where reasonably possible. The quarterly process should support reliable records, not simply transmit unreviewed bank feeds.
What digital records should support the update?
MTD requires the relevant business records to be kept digitally in compatible software or in a connected set of digital systems.
For each transaction, the records should normally identify enough information to support the amount, date and relevant income or expense category. The precise workflow may differ depending on the software and the nature of the business.
Before the second update, review whether the records include:
- Sales invoices and cash sales
- Marketplace and payment-processor settlements
- Rental statements and rent receipts
- Bank and card transactions
- Supplier invoices and receipts
- Finance and loan transactions
- Mileage or motor costs, where relevant
- Payments made personally for the business
- Refunds, credit notes and chargebacks
- Transactions from every relevant bank account
Automatic bank feeds are useful, but they do not explain the tax treatment of a transaction. Imported items still need to be reviewed and categorised.
Do you need a separate update for each business?
Yes. HMRC guidance requires quarterly updates for each self-employment and property business.
For example, a taxpayer may have:
- A consultancy sole trade
- A separate retail sole trade
- A UK property business
- A foreign property business
The software setup must reflect the income sources correctly. Combining everything into one unidentified total may produce an incomplete or incorrect submission.
This is particularly important where one income source is fully recorded but another is still being maintained in a spreadsheet, on paper or in a separate bank account.
What if properties are jointly owned?
For jointly let properties, HMRC allows the quarterly update to include either:
- The taxpayer’s share of property income and expenses, or
- The taxpayer’s share of property income only
If expenses for jointly let properties are not included during the year, they must be reported after the tax year by resending the fourth quarterly update before the tax return is submitted.
Expenses for solely owned properties cannot be omitted in the same way. Where a taxpayer has both jointly and solely owned properties, the records need to distinguish the two arrangements.
Ownership, beneficial entitlement and the way income is divided between spouses or civil partners should be reviewed separately. MTD does not change the underlying property tax rules.
What if there was no activity in the period?
A quarterly update is still required when there was no income and no expense activity during the update period.
The software is used to tell HMRC that there were no relevant figures. A quiet quarter, a seasonal trade or a temporarily empty rental property does not automatically remove the submission requirement.
If the business or property income source has genuinely ceased, the position should be updated properly rather than treating every future period as nil.
What should be checked before submitting?
A useful review can be completed without turning the quarterly update into a full year-end exercise.
1. Confirm the correct update period
Check whether the software is using standard or calendar periods. The choice should be consistent with the first update.
2. Reconcile bank and card accounts
Match the balances and transactions in the software to the relevant statements. Investigate duplicated bank-feed entries, missing dates and unmatched transfers.
3. Review sales and rental income
Check that income has not been omitted merely because it was received in cash, through a platform, into another bank account or after fees were deducted.
A platform deposit may be net of commission or charges. Recording only the net receipt can understate both income and expenses.
4. Review uncategorised items
Do not leave large balances in categories such as suspense, miscellaneous or ask my accountant without understanding what they contain.
5. Separate personal transactions
Personal spending should not be claimed as a business expense. Where a mixed-use cost is partly allowable, apply a reasonable basis and retain the calculation.
6. Check loans and transfers
Money moved between the taxpayer’s own accounts is not normally income or an expense. Loan receipts and repayments also need to be separated from interest and fees.
7. Check each income source
Confirm that every sole trade and property business has its own complete digital records and required update.
8. Compare with the first update
The second update is cumulative. Review whether the movement since the first update is commercially credible. An unusual fall in income or sudden increase in one expense category may indicate a missing feed or miscoding.
9. Save supporting evidence
Make sure invoices, receipts, statements and working papers can be linked back to the digital entries.
10. Keep submission evidence
Retain the software confirmation, submission date and a copy or export of the totals sent.
Can an update be sent early?
An update can normally be sent after the end of the update period and by the deadline.
HMRC also permits submission up to 10 days before the end of the period if no further transactions are expected. This may help someone who will be unavailable, but it should not be used where income or expenses are still likely to arise.
For most active businesses, sending the update after the period has closed allows a better reconciliation and review.
What happens after the update is sent?
The HMRC online account should show recent activity confirming that a quarterly update was sent.
The compatible software and HMRC account may also show an estimated tax bill for the year to date. This can help with cashflow planning, but it is not necessarily the final liability.
The estimate may be incomplete where:
- Employment, savings, dividends or other income is missing
- The accounting period does not align with the tax year
- Capital allowances or losses have not been entered
- Student or postgraduate loan information is incomplete
- Property finance cost relief has not been finalised
- Payments on account have not been reflected correctly
- Year-end adjustments remain outstanding
Treat the estimate as a planning figure, not as a substitute for a reviewed tax forecast.
How are errors corrected?
If an error is identified after an update, correct the underlying digital records.
Because updates are cumulative, the corrected totals should then flow into the next quarterly update. The aim is to keep the records accurate rather than to recreate a separate set of figures outside the software.
After the fourth quarterly update, further corrections may require that fourth update to be resent before the year-end tax adjustments and final tax return are completed.
The exact steps depend on the software. Retain a note explaining significant corrections, particularly where figures move materially between updates.
What if the 7 November deadline is missed?
HMRC will not apply penalty points for late quarterly updates in the 2026/27 tax year. This first-year easement does not remove the obligation.
The missing update should still be sent as soon as possible. The quarterly updates must be completed before the 2026/27 tax return can be submitted through the software.
From later tax years, the points-based penalty system is due to apply to late quarterly updates. A missed deadline can produce a penalty point. Reaching four points can trigger a £200 penalty, with further £200 penalties for additional failures while the threshold conditions continue.
Late-filing penalties for the final tax return can still apply in 2026/27. The absence of quarterly penalty points should not be interpreted as permission to postpone the records until the year end.
The quarterly update does not replace the tax return
After the final quarterly update, the taxpayer must still complete the year-end process through compatible software.
For the 2026/27 tax year, the online Self Assessment filing deadline is normally 31 January 2028.
The final process brings together:
- Final self-employment and property figures
- Corrections to the digital records
- Accounting and tax adjustments
- Employment, pension, savings, dividend and other income
- Reliefs, allowances and claims
- Capital gains information where required
- Student loan and other relevant details
The balance of tax for 2026/27 is also normally due by 31 January 2028, together with any first payment on account for 2027/28.
A practical 7 November checklist
Before approving the second quarterly update:
- Confirm that MTD applies for 2026/27
- Confirm that registration and software authorisation are complete
- Check whether standard or calendar periods are being used
- Review records through 5 October or 30 September, as applicable
- Reconcile all relevant business bank and card accounts
- Record cash, platform and personally paid transactions
- Review missing, duplicated and uncategorised entries
- Check gross income before fees has been recorded correctly
- Separate transfers, loans and private spending
- Confirm each sole trade and property business has been included
- Review jointly owned property treatment
- Submit a nil update where required
- Compare the cumulative totals with the first update
- Save evidence of the submission
- Update the tax forecast and cash reserve
Common mistakes to avoid
Reporting only July to September
The second update is cumulative. Standard periods cover 6 April to 5 October, while calendar periods cover 1 April to 30 September.
Treating bank-feed data as complete bookkeeping
Bank feeds can omit cash transactions, platform fees, personally paid costs and transactions from disconnected accounts.
Combining separate businesses incorrectly
Each self-employment and property business needs the correct update. The software structure must reflect the actual sources.
Trying to finalise every tax adjustment in November
Quarterly updates are summaries from digital records. Most year-end tax adjustments are dealt with later.
Ignoring the update because first-year penalty points do not apply
The requirement remains. Delaying the submission also reduces the value of the system as a current record and tax-planning tool.
Assuming the tax estimate is final
The estimate depends on the information available. Missing income, reliefs and year-end adjustments can change the liability substantially.
Frequently asked questions
Is the second MTD quarterly update due on 7 November 2026?
Yes. The second quarterly update for the 2026/27 tax year is due by 7 November 2026.
Does it cover only three months?
No. The update is cumulative. It covers 6 April to 5 October under standard periods or 1 April to 30 September under calendar periods.
Do I have to upload receipts to HMRC?
No. HMRC receives category totals, not each invoice or receipt. You must still keep the underlying digital records and supporting evidence.
Do I need to calculate capital allowances before submitting?
Not normally. Accounting and tax adjustments are generally dealt with later in the year-end process.
What if I have no income or expenses?
You must still send an update for the period unless the income source has ceased or an exemption applies.
Can my accountant submit the update?
An authorised agent can assist and submit through compatible software, but the taxpayer remains responsible for providing complete records and confirming the position.
Is any tax payable on 7 November?
The quarterly update itself does not create a separate payment deadline. Existing Self Assessment payment dates continue to apply.
Will I be fined if the 2026 update is late?
HMRC has stated that it will not apply quarterly-update penalty points for 2026/27. The update is still required and should be submitted promptly.
Make the second update useful
The best outcome is not simply a successful software receipt.
A good quarterly process should also show:
- Whether income is increasing or falling
- Which costs are changing
- Whether margins remain sustainable
- How much cash should be reserved for tax
- Whether customer debts or property arrears are building
- Whether the current tax estimate is credible
When the underlying records are accurate, MTD can become part of a practical tax and cashflow review rather than another deadline completed in isolation.
Speak to PR Accountants Ltd
PR Accountants Ltd helps sole traders and landlords prepare for and comply with Making Tax Digital for Income Tax.
We can help you:
- Confirm whether MTD applies
- Review your software and digital-record setup
- Reconcile and correct the records
- Prepare and submit quarterly updates
- Separate jointly owned and solely owned property figures
- Estimate the tax position and plan cash reserves
- Complete the year-end adjustments and final tax return
- Apply for an exemption where the conditions may be met
If the 7 November 2026 deadline applies to you, contact us before submitting figures you are unsure about.
PR Accountants Ltd Email: info@praccounting.co.uk Telephone: 0330 043 0792 Mobile and WhatsApp: 07946 617369 Website: www.praccounting.co.uk
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Related Week 5 guides
- MTD Income Tax: What Counts as Qualifying Income?
- MTD Income Tax Exemptions: Who May Be Able to Apply?
Official guidance
- HMRC: Send quarterly updates
- HMRC: Sign up for Making Tax Digital for Income Tax
- HMRC: Penalties for Making Tax Digital for Income Tax
This article provides general information and does not constitute personalised accounting, tax, legal or financial advice. MTD obligations depend on the taxpayer’s income, circumstances, software setup and any applicable exemption.
