MTD ITSA Quarterly Update Deadlines and the Final Declaration, Explained for Landlords

For a Harrow landlord who has crossed the threshold into Making Tax Digital for Income Tax, the rhythm of the tax year changes completely. The familiar single Self-Assessment return filed once a year by 31 January gives way to four quarterly updates and a year-end Final Declaration. The mechanics are not difficult once they are set out clearly, but the dates are fixed and the penalty regime for missing them is new, so it is worth understanding exactly what is due and when before the first quarter ends. Whether you are even in scope yet is decided by how HMRC works out your qualifying income, and this piece picks up from the point where you know you are.

The four quarterly update deadlines

A landlord using the standard quarterly periods, which align to the tax year running from 6 April to 5 April, submits four updates. Each one is due one month and two days after the period it covers ends. HMRC's guidance on sending quarterly updates sets out the standard dates, and they are the same every year:

The point that surprises most landlords is in the "period covered" column. Every standard update runs from 6 April, not from the end of the previous quarter. The updates are cumulative year-to-date totals, not stand-alone three-month snapshots. The Quarter 2 update covers 6 April to 5 October in full, restating and updating the figures already sent in Quarter 1. This matters because a correction to an earlier quarter is simply absorbed into the next cumulative update rather than requiring an amended filing.

What each update actually contains

A quarterly update is a summary of property income and expenses for the cumulative period, broken down into HMRC's standard categories. It is not a tax calculation and nothing is paid at the quarterly stage. HMRC uses the figures to produce a running in-year estimate of the tax due, which is an indication rather than a demand. For a landlord with one property business, a single update covers the whole portfolio; there is no separate filing per property, although the underlying digital records must hold the detail at property level in case of an enquiry.

Because the update is a cumulative position rather than a final figure, the quarterly numbers do not need to carry every year-end adjustment. Capital allowances, private-use adjustments, the treatment of allowable expenses against capital improvements, and reliefs are all dealt with at the year end, not quarter by quarter. The quarterly job is to keep the digital records current and submit the running totals on time.

The digital records that sit behind the updates

The quarterly cadence only works if the underlying records are themselves digital, because the updates have to be pulled straight from software that connects to HMRC rather than typed into a portal. A digital record under MTD is a record of each item of property income and expense created and stored in compatible software, and for every transaction it has to capture the amount, the date the rent was received or the cost was incurred, and the category it falls into. For residential lettings the categorisation has to go far enough to flag whether a cost is a restricted finance cost, because mortgage interest is no longer a straightforward deduction and has to be identifiable for the year-end calculation.

There is no requirement to abandon a spreadsheet that already works. HMRC accepts bridging software that links an existing spreadsheet to the MTD system, provided the data flows through digitally without being manually re-keyed, so the figures that reach HMRC trace back unbroken to the original entry. The records, whether held in an all-in-one product or a spreadsheet plus bridging tool, then have to be retained for at least five years after the 31 January submission deadline for the tax year. The professional bodies have published practical readiness guidance for landlords on choosing software and structuring records, and the ICAEW Making Tax Digital hub is a useful neutral starting point alongside HMRC's own pages.

Getting this layer right early is what makes the quarterly rhythm painless rather than a scramble, and it is also where specialist SPV and incorporation advice matters: a landlord deciding whether to hold property personally or through a company is also deciding which MTD regime, if any, the income falls under, and the record-keeping that follows differs accordingly.

The Final Declaration replaces the tax return

After the fourth quarterly update, the year is finalised through the Final Declaration. This is the step that replaces the old Self-Assessment return. At this point the landlord brings in everything that sits outside the quarterly updates, such as other income, reliefs, allowances and any final adjustments to the property figures, and confirms to HMRC that the position for the year is complete and correct. The Final Declaration is due by 31 January following the end of the tax year, the same date the Self-Assessment return used to fall on.

For the first MTD year starting 6 April 2026, that means the four quarterly updates land on 7 August 2026, 7 November 2026, 7 February 2027 and 7 May 2027, and the Final Declaration is due by 31 January 2028. The payment dates do not change: tax remains payable on the usual 31 January and 31 July schedule, including payments on account where they apply. MTD changes how income is reported, not when the tax is paid.

What happens if you miss a deadline

Late submissions are dealt with under a points-based system rather than an immediate fixed penalty. HMRC's penalties guidance for Making Tax Digital for Income Tax sets out how it works. You receive one penalty point for each quarterly update or Final Declaration you miss, and the penalty point threshold is four points. Reach four points and a £200 penalty is charged, with a further £200 penalty each time you miss another deadline after that. Points are removed automatically 24 months after the missed deadline provided you stay below the threshold, so an isolated late update that is quickly put right does not lead to a charge on its own.

A landlord who reports both property and self-employment income has the deadlines aligned, so a single late filing does not multiply across the two income sources at the quarterly stage. The practical risk is not a single slip but a pattern: four missed deadlines inside the rolling window is what turns penalty points into a real bill.

Late payment is a separate calculation

Penalty points are about filing on time. Paying the tax late is charged separately and more steeply. For the 2026-27 year there is no late payment penalty if the tax is paid within 15 days of the due date. Pay between 16 and 30 days late and a penalty of 3% of the tax outstanding at day 15 applies. Go beyond 30 days and you face that 3%, plus a further 3% of the tax outstanding at day 30, plus an annualised rate of 10% charged daily on the balance from day 31 until it is cleared. The message is simple: even if a Final Declaration is filed on time, the tax behind it has to be funded, because the late payment clock runs independently of the filing position.

Keeping on top of the rhythm

The way to make MTD undramatic is to treat the quarterly update as a light bookkeeping checkpoint rather than a mini tax return. Keep the digital records current as rent comes in and expenses go out, reconcile each quarter, and submit the cumulative total well before the 7th of the deadline month. For most Harrow landlords the heavier thinking still happens once a year at the Final Declaration, where the adjustments and reliefs are applied, and that is the point at which working with an accountant adds the most value. The quarterly updates themselves are routine once the software and the rhythm are set up properly. The same SPV exclusion that keeps company-held property outside MTD is set out in the MTD compliance hub, which is worth reading alongside this if part of your portfolio sits in a limited company.

Common questions about MTD deadlines

Do I pay tax with each quarterly update?

No. The quarterly update is information only and produces an HMRC estimate, not a demand. Tax is still paid on the usual 31 January and 31 July dates, including any payments on account.

Are the quarterly figures final?

No. Each update is a cumulative running total that the next one updates, and all the year-end adjustments and reliefs are made at the Final Declaration. A quarter that needs correcting is simply restated in the following cumulative update.

What if I miss one quarterly update by a few days?

A single late update gives you one penalty point. A point on its own does not trigger a charge; the £200 penalty only applies once you reach four points within the rolling window, and points drop off automatically after 24 months of compliance.

Does the Final Declaration still fall on 31 January?

Yes. The Final Declaration replaces the Self-Assessment return but keeps the same 31 January deadline following the end of the tax year, so the year-end date landlords already know does not move.