The first quarterly period under Making Tax Digital starts on 6 April. If your income from self-employment or property tips over £50,000, that's you. You're in.
The good news: your first quarterly update isn't due until 5 August 2026. You have roughly 90 days to get your records in order, pick your software setup, and build a rhythm that works.
Let's use them well.
First, understand what you're actually signing up for
MTD doesn't change what you record. It changes how and when it reaches HMRC.
You still track income and expenses exactly as before. The difference is that every quarter, a summary of those figures goes to HMRC digitally — through software that has a live API connection to their systems. No more saving it all up for January. Four short updates across the year, then a Final Declaration instead of a Self Assessment return.
“The rhythm you build in the first 90 days is the rhythm you'll keep for years. Worth getting right.”
The first period runs from 6 April to 5 July 2026. Your first submission deadline is 5 August 2026. That's your target. Everything in this guide points toward it.
What to record — if you're self-employed
HMRC isn't asking for your receipts. They want totals, broken down by category. Every transaction needs a date, a description, an amount, and the right bucket. These are the actual HMRC categories — not our invention.
All business income — invoices paid, cash received, fees
Materials, stock, items bought to resell or use in your work
Employees, subcontractors, virtual assistants
Office rent, utilities, insurance on business premises
Fixing equipment, tools, business property
Mileage, trains, parking — for business trips only
Software, tools, professional memberships, marketing spend
Accountants, solicitors, consultants used for the business
Anything genuinely for the business that doesn't fit above
| HMRC category | What goes here | Type |
|---|---|---|
| Turnover | All business income — invoices paid, cash received, fees | Income |
| Cost of goods sold | Materials, stock, items bought to resell or use in your work | Expense |
| Wages & staff costs | Employees, subcontractors, virtual assistants | Expense |
| Premises & running costs | Office rent, utilities, insurance on business premises | Expense |
| Repairs & maintenance | Fixing equipment, tools, business property | Expense |
| Travel & transport | Mileage, trains, parking — for business trips only | Expense |
| Advertising & subscriptions | Software, tools, professional memberships, marketing spend | Expense |
| Professional fees | Accountants, solicitors, consultants used for the business | Expense |
| Other allowable expenses | Anything genuinely for the business that doesn't fit above | Expense |
You don't need to send receipts to HMRC. But you do need to keep them digitally in case of a compliance check. A photo on your phone saved to a folder is fine. The rule is: if you can't show it, don't claim it.
What to record — if you're a landlord
Rental income has its own categories, separate from any self-employed business you might also run. Every property you let out sits under the same MTD obligation if rental income exceeds the threshold.
All rental income across your properties
One-off payments from tenants for long leases
Letting agent fees, buildings insurance, ground rent
Boiler repairs, redecorating between tenancies, fixing things
Mortgage interest (subject to the usual relief rules)
Solicitor costs, accountant fees directly related to the property
Cleaners, gardeners, anything you pay for on behalf of tenants
Anything else genuinely for the rental business
| HMRC category | What goes here | Type |
|---|---|---|
| Rent received | All rental income across your properties | Property income |
| Premiums from lease grants | One-off payments from tenants for long leases | Property income |
| Premises & running costs | Letting agent fees, buildings insurance, ground rent | Expense |
| Repairs & maintenance | Boiler repairs, redecorating between tenancies, fixing things | Expense |
| Finance costs | Mortgage interest (subject to the usual relief rules) | Expense |
| Professional fees | Solicitor costs, accountant fees directly related to the property | Expense |
| Cost of services | Cleaners, gardeners, anything you pay for on behalf of tenants | Expense |
| Other allowable property expenses | Anything else genuinely for the rental business | Expense |
Your two paths forward: bridging vs. native MTD software
Before you record a single thing, you need to decide how your records are going to reach HMRC. There are two legitimate routes. Neither is wrong. They suit different people.
Spreadsheet + bridging software
Keep recording in Excel or Google Sheets exactly as you do now. At the end of each quarter, bridging software like Otis reads your spreadsheet and submits the update to HMRC on your behalf. Your workflow changes almost nothing.
Native MTD software
Record income and expenses directly inside an MTD-compliant platform. The software stores your records digitally from the start and submits quarterly updates without a separate bridging step. Otis supports this too.
Choose spreadsheet + bridging if your records are already in good shape in Excel, you know your way around a spreadsheet, and you don't want to change your workflow. The only new step is uploading your spreadsheet at quarter-end and confirming the categorisation. That's it.
Choose native MTD software if you want everything in one place, you'd rather not manage spreadsheets at all, or you have multiple income sources getting complicated to track manually. Recording as you go tends to suit more people better than reconciling at quarter-end.
The one thing you cannot do
You can't manually type your figures into an HMRC portal. There is no portal. MTD requires a live digital link — software connected directly to HMRC via their API. Copy-and-paste doesn't count. Emailing figures doesn't count. The link has to be live.
Your 90-day plan, week by week
Five stages. One quarter. Follow this and you'll hit 5 August without breaking a sweat.
Pick your path — spreadsheet + bridging, or native software — and get it set up. Sign up for HMRC's MTD for Income Tax service. If you have more than one income source, sign up for both at the same time. Create a dedicated folder, digital or physical, for April expenses. The habit you form this week is the one you'll use all year.
Record every income and expense as it happens, or set aside 20 minutes each week to catch up. Don't let it build. The whole premise of MTD is that your records are live, not retrospective. Use the HMRC categories from the tables above — getting the categorisation right now saves you work at submission time.
Do a quick review of what you've recorded so far. Any transactions forgotten? Anything miscategorised? This is also a good moment to look at your estimated tax position if your software shows it. No surprises in January starts with awareness in May.
Reconcile your records against your bank statement. Every income item that hit your account should be in your records. Every business expense paid should be logged. If you're using a spreadsheet, this is when you upload it to your bridging software and confirm the categorisation. If you're using native software, your records are already there.
Your first quarterly update covers 6 April to 5 July. The deadline is 5 August 2026. Review the summary your software produces, confirm the figures look right, and submit. HMRC confirms receipt. You're done for the quarter. Three more to go, then the Final Declaration in January 2028.
A quick word on the soft landing
HMRC has confirmed there will be no penalty points for late quarterly updates during the 2026–27 tax year. This is genuine breathing room and worth knowing about.
The soft landing exists so you can get comfortable with the process — not to give you a reason to delay starting it. The rhythm you build in those first 90 days is genuinely hard to rebuild from scratch at month six.
The checklist you'll actually use
Pin this. Come back to it at the end of each quarter.
Signed up for MTD with HMRC (all income sources at once)
Software set up and connected to HMRC via API
All income recorded with date, description, and amount
All business expenses logged and categorised correctly
Records reconciled against bank statement
Receipts for all expenses saved digitally — photos are fine
Quarterly summary reviewed before submitting
Update submitted by the deadline — confirmation received from HMRC
One last thing
If you've read this far and it still feels like a lot, here's the honest version: the hardest part of MTD is the first quarter. After that, it's a habit. A light one.
The first quarter takes longer because you're setting things up, tracking your income and expenses, and getting comfortable. That's normal. Build in time for it. Otis will handle the heavy lifting.
You've got 90 days. Use them.
Ready to get MTD-ready?
Otis works whether you keep a spreadsheet or want to record directly in the platform. Either way, your quarterly updates go to HMRC automatically — no manual steps, no missed deadlines.
Disclaimer
The content in this guide reflects our understanding of MTD legislation at time of publication. It may be subject to change and may not apply to your individual circumstances. This guide should not be relied upon as tax advice — you are responsible for complying with tax rules and regulations and should seek independent advice if you require further information.