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Two trades and a rental? That is three quarterly updates, not one.

By Buzz Accounting · 2026-08-05

Making Tax Digital for Income Tax started on 6 April 2026, and the first quarterly update is due on 7 August 2026. HMRC puts around 864,000 sole traders and landlords in this first mandatory wave.

If you have one straightforward freelance business, the change is mildly annoying and then it is over. If your income comes from more than one place — a freelance practice plus a small product side-line, or self-employment plus a let flat — the change is bigger than most people have been told, and it starts with how you got dragged in at all.

The threshold is added up across everything you do

The rule is qualifying income over £50,000, and qualifying income means the gross turnover, before expenses, from all of your self-employment and property income combined, taken from your 2024/25 Self Assessment return.

Which means you can be inside Making Tax Digital without a single one of your businesses coming close to £50,000. Consider Marc, a freelance designer:

Design consultancy turnover: £38,000
A separate small trade selling screen prints: £9,000
Rent from one let flat: £14,000

No single figure is over £50,000. Added together they come to £61,000, and Marc is mandated. Note it is turnover, not profit — after expenses he may be earning far less than £50,000 and still be in.

The later waves work the same way: over £30,000 of qualifying income in 2025/26 brings you in from 6 April 2027, and over £20,000 in 2026/27 brings you in from 6 April 2028.

One update per source, per quarter

Here is the part that surprises people. Making Tax Digital reports businesses, not people. Every separate trade and every property business files its own quarterly update. Marc has three sources, so he files twelve quarterly updates a year, not four.

The standard periods and deadlines for 2026/27 are:

6 April to 5 July — due 7 August 2026
6 July to 5 October — due 7 November 2026
6 October to 5 January — due 7 February 2027
6 January to 5 April — due 7 May 2027

You can elect for calendar quarters instead, so the first period runs 1 April to 30 June, which suits anyone whose bookkeeping already runs to month ends. The deadlines stay on the seventh.

Three things soften the blow, and they are worth knowing before you panic:

One final declaration. However many sources you have, a single final declaration pulls the year together, due by 31 January after the tax year ends — the same date Self Assessment always had.
One penalty points total. Points are counted per person, not per business, so three sources do not mean three times the exposure.
Updates are cumulative. Each quarterly update restates the year to date rather than reporting three months in isolation. Get a figure wrong in quarter one and you fix it in quarter two; there is no resubmission and no correction process to learn.

The three-line easement, and why it matters more with several sources

If a business's gross income is below the VAT registration threshold of £90,000, its quarterly update can be reported in reduced form — total income, total expenses and the resulting profit — rather than a full category breakdown.

For someone with several small sources this is the difference between a manageable quarter and a miserable one. Marc's £9,000 print business does not need its costs analysed across a dozen headings four times a year. It needs three lines. Set that up in your software at the start rather than discovering it in January.

What stays outside the quarterly cycle

Quarterly updates cover self-employment and property only. Employment income, dividends, bank interest, pension income and capital gains are not reported quarterly at all — they arrive once, in the final declaration, exactly as they always did. So does anything that adjusts your profit rather than describing your turnover: capital allowances, private-use adjustments, the trading allowance, pension contributions and Gift Aid.

This is the most common misunderstanding we are hearing. A quarterly update is a summary of income and expenses. It is not a tax return, it does not calculate your tax, and nothing about it is final.

Jointly owned property

If you own a rental jointly, you report your share. Your co-owner reports theirs, on their own software and their own timetable, and there is no requirement for you both to use the same product or the same agent. If the property is jointly owned with a spouse or civil partner and you have made a Form 17 election to split the income other than 50/50, that split carries through to the quarterly figures.

Penalties: the first year is softer than the second

HMRC has confirmed there are no penalties for missing a quarterly update deadline in 2026/27. That is a genuine grace period for the first year of the regime, and it is the reason to use these next few quarters to get the process right rather than to ignore them.

From 2027/28, each missed quarterly update earns one penalty point. At four points you get a £200 penalty, and another £200 for every missed deadline after that. Points below the threshold expire 24 months after the deadline you missed.

Late payment is a separate regime and it is not softened. For 2026/27, tax still unpaid 15 days after the due date attracts 3% of the amount outstanding, another 3% of what is outstanding at day 30, and from day 31 interest-style penalties accrue at an annualised 10%. From 2027/28 the first two charges rise to 4% each. Nothing about Making Tax Digital changes when your tax is due: it is still 31 January, with payments on account on 31 January and 31 July.

What this costs in time, honestly

For Marc's three sources, the realistic shape of the year looks like this. If his bookkeeping is already in software and reconciled to his bank feed weekly, each quarterly filing round takes perhaps 30 to 45 minutes of review across all three businesses, four times a year — call it three hours across the year that he was not spending before, in exchange for a January that is no longer a cliff.

If his bookkeeping is a shoebox and a spreadsheet, the honest answer is that Making Tax Digital does not add three hours; it forces forward roughly the same work he was doing in one panicked January week, and splits it into four. The cost is the habit, not the filing. That is why the people struggling most this month are the ones who never had a system, not the ones with the most income.

What to do before 7 August

Confirm you are actually mandated. Add the gross turnover of every trade and every property from your 2024/25 return. Over £50,000 combined means you are in.
Count your sources. Each separate trade and each property business needs its own update, and its own set of records.
Check your software is signed up for Making Tax Digital for Income Tax specifically — being on cloud accounting is not the same as being connected for MTD, and the authorisation step is separate.
Turn on the three-line easement for any business under £90,000 of gross income.
Reconcile 6 April to 5 July fully before you file, and remember you can correct it in November if something surfaces.
Put 7 November, 7 February and 7 May in the diary now, alongside the dates in our self-employed tax calendar.

Where we help

Quarterly updates are included in every one of our packages where they are required — we file them for you, for every source you have, and we tell you what the numbers mean rather than just submitting them. Our Making Tax Digital guide covers the mechanics in full, and the freelancer and contractor tax guide covers everything that lands in the final declaration. Fixed fees from £19 + VAT a month. Get started.

Quick answers

About this post

Do I file one quarterly update or one per business?

One per business. Making Tax Digital reports businesses rather than people, so every separate trade and every property business submits its own quarterly update. A freelancer with a second small trade and one let flat files twelve updates a year, not four. The compensations are real though: there is still only one final declaration covering everything, due by 31 January after the tax year ends, and penalty points are counted per person rather than per business, so extra sources do not multiply your penalty exposure.

How is the £50,000 threshold worked out if I have several income streams?

HMRC adds together the gross income, before expenses, from all of your self-employment and all of your property income, using the figures on your 2024/25 Self Assessment return. A design business turning over £38,000, a side trade at £9,000 and a rental at £14,000 total £61,000, so all three are pulled into Making Tax Digital even though none of them is near £50,000 alone. Because the test is on turnover rather than profit, plenty of people with modest actual earnings are mandated.

What happens if I get a figure wrong in a quarterly update?

You correct it in the next one. Quarterly updates are cumulative, meaning each submission restates your income and expenses for the year to date rather than reporting a single isolated quarter. So an invoice you missed in the period to 5 July is simply picked up in the update due 7 November, and the running total comes out right. There is no resubmission, no amendment process and no penalty for the original figure. Everything is settled properly at the final declaration in any case.

What are the penalties for missing the 7 August deadline?

For 2026/27 there are none. HMRC has confirmed that no penalty points will be issued for late quarterly updates during the first year of the regime. From 2027/28 onwards each missed deadline earns one penalty point, four points trigger a £200 penalty, and every further missed deadline after that costs another £200. Points below the threshold drop off 24 months after the deadline concerned. Late payment of tax is a separate matter and carries no grace period: 3% at day 15, a further 3% at day 30 and 10% annualised thereafter.

Does a quarterly update mean I pay tax four times a year?

No. A quarterly update is a summary of your income and expenses sent through compatible software. It does not calculate your tax and it does not create a payment date. Your tax remains due on 31 January after the tax year ends, with payments on account on 31 January and 31 July where they apply, exactly as under Self Assessment. What the quarterly figures do give you, if you use them, is a much earlier and more accurate view of the bill coming in January, which is the one genuine upside of the regime.

Do I still have to do a Self Assessment tax return?

The annual return is replaced by a final declaration, but the job is much the same and the deadline is identical at 31 January following the end of the tax year. The final declaration pulls together your quarterly figures, applies the adjustments that never appear in them, and confirms the year as correct and complete. Those adjustments matter: capital allowances, private-use apportionments, the trading allowance, pension contributions and Gift Aid all land here, as does everything outside the quarterly cycle such as employment income, dividends, bank interest and capital gains. However many businesses you run, there is only ever one final declaration.

What about a rental property I own jointly?

You report your share and your co-owner reports theirs. There is no requirement to use the same software as the other owner, or the same accountant, and the two of you can file to entirely different timetables provided each of you meets the deadline. If the property is held jointly with a spouse or civil partner and you have made a Form 17 election to split the income other than equally, that split flows through to your quarterly figures in the same proportions it applies to the annual ones.

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