Making tax digital - Update

Making Tax Digital for Income Tax was introduced from 6 April 2026 and includes sole traders and landlords with qualifying income over £50,000.

This means that if you are a locum GP, a self-employed GP, or have rental income and your taxable income is above £50,000 threshold, you might be required to register for MTD and submit quarterly updates to HM Revenue & Customs.

The first MTD phase does not include partnerships.

The first quarterly update is due by 7th August 2026 and covers period from 6th April to 5th July 2026. 

Further updates are due by 7th November 2026, 7th February 2027, and 7th May 2027, with final declaration for 2026/27 due by 31st January 2028.

Before every submission, it is vital that you check that the bookkeeping is complete and up to date for the quarter and review the income and expenses recorded.

1. Log into Xero.

2. Navigate to Tax>MTD for Income Tax.

3. From here you will see a box titled To do and in that box text labelled Send Qx end update. This is the quarterly update that is due for filing. 

4. Click on the View button to see the breakdown of your income and expenses for the year to date.

5. If you have multiple updates to send these are listed on the left-hand side of the screen and you can view each one individually by clicking on the name of the submission. This would usually apply if you are a landlord and have Rental income as well as Self Employment.

6. If you want to check any of the transactions in the income and expense sections of the quarterly update, click on the underlined text to view the details.

7. This will show you the income and expense codes that make up the figure shown. To see the individual transactions in each code, right click on the value stated and select Open link in new tab. This will mean that you do not lose your place in the quarterly submission and can easily click back into it.

8. If you need to amend any of the transactions, click on them and make the relevant changes. Follow the steps above to ensure they are reflected in your update and your income and expenditure is now accurate.

9. When you are happy that the figures are correct and as you expect to see them, click on the button Send update to HMRC.

There are no late filing penalties for quarterly updates for the first MTD IT year 2026/27, however making submissions on time will help you keep bookkeeping up to date, identify and rectify errors sooner and develop good habits before penalties are introduced in later years.