MTD quarterly updates: what tradespeople need to submit in 2026

Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) kicks in from April 2026 for anyone earning over £50,000 from self-employment or property. From April 2027, that threshold drops to £30,000. If you are a sole trader plumber, electrician, builder or any other tradesperson in those income brackets, this affects you directly.

This guide explains exactly what a quarterly update is, what you need to submit, when the deadlines are, and what happens if you miss one.

What is MTD for Income Tax?

MTD for Income Tax replaces the annual Self Assessment tax return with a system of regular digital updates sent to HMRC throughout the year. You will use compatible software to keep digital records and send four quarterly updates per tax year, plus a final end-of-period statement.

According to HMRC, the aim is to make tax more accurate and reduce the year-end scramble. For tradespeople with irregular income and variable expenses, it means more admin spread across the year rather than one big push in January.

Who is affected in 2026?

From 6 April 2026, MTD for ITSA is mandatory if you are self-employed with qualifying income over £50,000. From 6 April 2027, the threshold drops to £30,000. Partnerships are not included in the first phase. Limited companies are not affected by MTD for ITSA.

What counts as a quarterly update?

A quarterly update is a digital submission of your income and expenses for a three-month period. It is not a tax payment. You submit four per tax year: Q1 covers 6 April to 5 July, Q2 covers 6 July to 5 October, Q3 covers 6 October to 5 January, and Q4 covers 6 January to 5 April. Each update is due within one month of the quarter end.

What information goes in each update?

Your total income and total expenses for the period, using HMRC-defined categories: cost of goods and materials, sub-contractor costs, wages, motor expenses, travel, equipment and tools, office costs, professional fees, insurance, advertising, finance charges, and other allowable expenses. You do not need individual receipts at this stage.

CIS deductions

If contractors deduct CIS tax before paying you, record this separately as tax deducted rather than an expense. Use the CIS deduction calculator to check correct amounts.

The end-of-period statement

After four quarterly updates, you submit an end-of-period statement (EOPS) to finalise your figures and claim allowances. The EOPS deadline is 31 January following the tax year end. For 2026/27, that is 31 January 2028.

What software do you need?

You must use HMRC-recognised software. HMRC maintains a list of compatible products. Look for software that submits directly to HMRC, categorises expenses correctly, and stores digital records.

Penalties for late submissions

A new points-based penalty system applies. Each late submission earns one penalty point. At four points you receive a £200 fine. Additional points also attract £200 fines. Points reset after a period of full compliance.

How to prepare

1. Check your recent tax returns. If income is approaching £50,000, act now.
2. Trial compatible software before April 2026.
3. Start keeping digital records now: photograph receipts and log expenses as you go.
4. Confirm with your accountant who will handle submissions.
5. Register for MTD ITSA through Government Gateway.

Use the mileage calculator to keep travel claims accurate and the VAT calculator if you are VAT registered.

FAQ

When does MTD for Income Tax start for tradespeople?

From 6 April 2026 for those earning over £50,000. From 6 April 2027 for those earning over £30,000.

How often do I submit?

Four quarterly updates plus an end-of-period statement and final declaration per tax year per income source.

What if I miss a quarterly deadline?

One penalty point. Four points triggers a £200 fine. Each further late submission also attracts a £200 fine.

Do I need new accounting software?

Only if your current software is not on HMRC approval list. Check gov.uk for the compatibility list.

Are CIS deductions included in quarterly updates?

Yes, recorded as tax deducted rather than an expense. Ensure your software has a CIS deductions suffered field.