Making Tax Digital for Sole Traders: Reporting Rental Income Quarterly

27 January 2026

From April 2026, sole traders with a turnover of £30,000 or more must comply with HMRC’s Making Tax Digital (MTD) for Income Tax requirements.

This system requires landlords and business owners to keep digital records and submit quarterly updates to HM Revenue & Customs (HMRC), rather than waiting until the end of the tax year.

For sole traders earning rental income, this means maintaining accurate, up-to-date digital records of all rent received, allowable expenses, and other property-related transactions. Quarterly reporting gives HMRC a real-time view of income, reduces errors, and helps taxpayers manage liabilities throughout the year.

The first quarter for the 2026/27 tax year ends on 30 June 2026. Landlords and sole traders with qualifying rental income must submit their digital report by 7 July 2026. Further updates are required throughout the year, allowing tax to be calculated progressively rather than as a single annual payment.

It is essential to use MTD-compatible software to track rent payments, property expenses, mortgage interest, and maintenance costs. This ensures records meet HMRC standards and can be submitted correctly each quarter.

Quarterly reporting under MTD does not replace your annual Self-Assessment tax return. Instead, it provides a running total of taxable income, helping landlords avoid last-minute calculations and reduce the risk of late filing penalties.

For sole traders with £30,000 or more in rental turnover, MTD offers a structured way to manage tax obligations, maintain accurate digital records, and spread payments across the year, making compliance simpler and more manageable.

Making Tax Digital 2026/27: Quarterly Reporting Timeline

• Q1: 6 April – 30 June 2026
  Quarter end: 30 June 2026
  Submission deadline: 7 July 2026
• Q2: 1 July – 30 September 2026
  Quarter end: 30 September 2026
  Submission deadline: 7 October 2026
• Q3: 1 October – 31 December 2026
  Quarter end: 31 December 2026
  Submission deadline: 7 January 2027
• Q4: 1 January – 31 March 2027
  Quarter end: 31 March 2027
  Submission deadline: 7 April 2027