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Making Tax Digital for Income Tax: Preparing for Your February Update

Writer: Brealey + Newbury
Brealey + Newbury
2 days ago
3 min read
Making Tax Digital for Income Tax is now live, and for many sole traders and landlords the first quarterly updates were a learning experience. The third deadline, 7 February 2027, falls just a week after the 31 January Self Assessment deadline, so getting your records in order now is the best way to avoid a January crunch and make quarterly reporting routine rather than a scramble. Working with experienced accountants in Mansfield means having support with bookkeeping, software and compliance, so quarterly reporting becomes just another part of running your business. For straightforward, proactive guidance, Brealey & Newbury is here to help. What Is Making Tax Digital for Income Tax? Making Tax Digital (MTD) for Income Tax became mandatory on 6 April 2026 for sole traders and landlords with qualifying income over £50,000 in the 2024/25 tax year. Qualifying income is your total turnover from self-employment and property before expenses. Instead of a single annual return, you now keep digital records in HMRC-compatible software and send quarterly updates, followed by a year-end tax return. Limited companies are not within scope. Who Joins Next? From April 2026: qualifying income over £50,000 (based on 2024/25) From April 2027: qualifying income over £30,000 (based on 2025/26) From April 2028: qualifying income over £20,000 (based on 2026/27) If you expect to fall into the 2027 group, the 2025/26 return you file by 31 January 2027 will be used to decide, so it is worth preparing now. Key Quarterly Deadlines for 2026/27 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 Your year-end tax return for 2026/27 is then due by 31 January 2028. In the meantime, your 2025/26 Self Assessment return and any tax owed are still due by 31 January 2027, only a week before the February update, which makes January an especially busy month. Some software lets you use calendar quarters instead, but the deadlines stay the same. How to Prepare for the February Update Reconcile your bank feed so every transaction from October to early January is categorised Upload receipts as you go rather than saving them up for the deadline Separate business and personal spending to keep records clean Review property income and costs for each rental separately if you are a landlord Check your software connection to HMRC well before the deadline Diary the remaining deadlines alongside your 31 January Self Assessment, so the two do not collide Common MTD Mistakes to Avoid Leaving bookkeeping until the week of the deadline Using spreadsheets without proper bridging software Miscategorising expenses, which carries through to your year-end figures Forgetting that each income source needs its own update Assuming the quarterly figures are your final tax position, when adjustments come at year end HMRC has signalled a lighter approach to late quarterly updates while people adjust to the new system, but that is no reason to fall behind. Good habits now will make the 2027 and 2028 years far easier. Why Quarterly Reporting Can Be an Advantage MTD is not just extra admin. Up-to-date records give you a clearer picture of profit, cashflow and tax owed throughout the year, so there are fewer surprises in January. Many business owners find it easier to plan purchases, set money aside for tax and spot problems early. When to Speak to an Accountant About MTD Your earlier updates felt rushed or confusing You have several income sources, such as a business and rental properties You are unsure which software suits your business You expect to join MTD from April 2027 or 2028 You are thinking about moving from sole trader to limited company HMRC's own Making Tax Digital guidance is a useful starting point for checking whether you are in scope. Supporting Businesses Across Mansfield From local trades and self-employed professionals to landlords and growing businesses across Nottinghamshire, Brealey & Newbury helps Mansfield clients keep on top of MTD without the stress. We can set up software, handle quarterly submissions or simply review your records before you file. Expert Help from Brealey & Newbury We offer proactive, year-round support rather than once-a-year compliance, with honest, jargon-free advice tailored to your business. Book a Consultation or explore our Accounting Services. Whether you are already filing under Making Tax Digital or preparing to join in 2027, Brealey & Newbury is here to help. Get in touch today to book a consultation and make your quarterly updates simple, accurate and on time.

Making Tax Digital for Income Tax is now live, and for many sole traders and landlords the first quarterly updates were a learning experience. The third deadline, 7 February 2027, falls just a week after the 31 January Self Assessment deadline, so getting your records in order now is the best way to avoid a January crunch and make quarterly reporting routine rather than a scramble. Working with experienced accountants in Mansfield means having support with bookkeeping, software and compliance, so quarterly reporting becomes just another part of running your business. For straightforward, proactive guidance, Brealey & Newbury is here to help.


What Is Making Tax Digital for Income Tax?


Making Tax Digital (MTD) for Income Tax became mandatory on 6 April 2026 for sole traders and landlords with qualifying income over £50,000 in the 2024/25 tax year. Qualifying income is your total turnover from self-employment and property before expenses.

Instead of a single annual return, you now keep digital records in HMRC-compatible software and send quarterly updates, followed by a year-end tax return. Limited companies are not within scope.


Who Joins Next?


  • From April 2026: qualifying income over £50,000 (based on 2024/25)

  • From April 2027: qualifying income over £30,000 (based on 2025/26)

  • From April 2028: qualifying income over £20,000 (based on 2026/27)


If you expect to fall into the 2027 group, the 2025/26 return you file by 31 January 2027 will be used to decide, so it is worth preparing now.


Key Quarterly Deadlines for 2026/27


  • 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


Your year-end tax return for 2026/27 is then due by 31 January 2028. In the meantime, your 2025/26 Self Assessment return and any tax owed are still due by 31 January 2027, only a week before the February update, which makes January an especially busy month. Some software lets you use calendar quarters instead, but the deadlines stay the same.


How to Prepare for the February Update


  • Reconcile your bank feed so every transaction from October to early January is categorised

  • Upload receipts as you go rather than saving them up for the deadline

  • Separate business and personal spending to keep records clean

  • Review property income and costs for each rental separately if you are a landlord

  • Check your software connection to HMRC well before the deadline

  • Diary the remaining deadlines alongside your 31 January Self Assessment, so the two do not collide


Common MTD Mistakes to Avoid


  • Leaving bookkeeping until the week of the deadline

  • Using spreadsheets without proper bridging software

  • Miscategorising expenses, which carries through to your year-end figures

  • Forgetting that each income source needs its own update

  • Assuming the quarterly figures are your final tax position, when adjustments come at year end


HMRC has signalled a lighter approach to late quarterly updates while people adjust to the new system, but that is no reason to fall behind. Good habits now will make the 2027 and 2028 years far easier.


Why Quarterly Reporting Can Be an Advantage


MTD is not just extra admin. Up-to-date records give you a clearer picture of profit, cashflow and tax owed throughout the year, so there are fewer surprises in January. Many business owners find it easier to plan purchases, set money aside for tax and spot problems early.


When to Speak to an Accountant About MTD


  • Your earlier updates felt rushed or confusing

  • You have several income sources, such as a business and rental properties

  • You are unsure which software suits your business

  • You expect to join MTD from April 2027 or 2028

  • You are thinking about moving from sole trader to limited company


HMRC's own Making Tax Digital guidance is a useful starting point for checking whether you are in scope.


Supporting Businesses Across Mansfield


From local trades and self-employed professionals to landlords and growing businesses across Nottinghamshire, Brealey & Newbury helps Mansfield clients keep on top of MTD without the stress. We can set up software, handle quarterly submissions or simply review your records before you file.


Expert Help from Brealey & Newbury


We offer proactive, year-round support rather than once-a-year compliance, with honest, jargon-free advice tailored to your business. Book a Consultation or explore our Accounting Services.


Whether you are already filing under Making Tax Digital or preparing to join in 2027, Brealey & Newbury is here to help. Get in touch today to book a consultation and make your quarterly updates simple, accurate and on time.

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