Making Tax Digital: A Step-by-Step Guide to Your First Quarterly Submission
For many sole traders and landlords, Making Tax Digital is no longer something sitting in the distance. The first reporting period is underway, and the first quarterly submission deadline is fast approaching.
If you are required to use Making Tax Digital for Income Tax from April 2026, your first quarterly update will cover the period from 6 April 2026 to 5 July 2026, with the submission due by 7 August 2026.
For many people, the biggest concern is not the deadline itself. It is understanding what needs to happen before that first submission is made.
Here is a simple step-by-step guide.
Step 1: Confirm You Are Signed Up
Before you can submit through Making Tax Digital, you need to be signed up for the service.
This will usually be done through your own Government Gateway account, or by your accountant if they are acting on your behalf.
You should confirm:
- you are registered for Self Assessment
- you have submitted a tax return in the last two years
- your business or property income details are correct
- your chosen software is connected to HMRC
Do not assume that downloading software automatically signs you up. It does not.
Step 2: Check Your Software Is MTD-Compatible
You must use software that works with Making Tax Digital for Income Tax.
This might be cloud accounting software such as Xero, Sage or FreeAgent, or bridging software if you continue to use spreadsheets.
Before your first submission, check:
- the software is approved for MTD for Income Tax
- your income sources are set up correctly
- your bank feed is connected where appropriate
- your categories match the type of income and expenses you need to report
Software is only helpful if it is set up properly.
Step 3: Bring Your Records Up to Date
Your first quarterly update is based on the income and expenses recorded during the quarter.
Before submitting, make sure you have entered and reviewed:
- all income received or invoiced
- all relevant business or property expenses
- bank transactions
- receipts and supporting documents
- any adjustments or corrections needed
If your records are incomplete, your quarterly update may not give an accurate picture.
Step 4: Reconcile Your Bank Transactions
Bank reconciliation is one of the most important parts of preparing for submission.
This means checking that the transactions in your software match your actual bank account.
You should look out for:
- missing transactions
- duplicated entries
- personal spending included by mistake
- income posted to the wrong category
- expenses coded incorrectly
Getting this right early makes every future submission easier.
Step 5: Review What You Are Submitting
A quarterly update is not the same as a full tax return, but it still needs to be based on accurate digital records.
Before submitting, review:
- income totals
- expense categories
- any unusual or one-off items
- whether the figures look reasonable
This is where many people benefit from support. The submission may seem straightforward, but the quality of the records behind it matters.
Step 6: Submit Before the Deadline
Once your records have been reviewed, your quarterly update can be submitted through your software.
Your first deadline is 7 August 2026.
Although HMRC has confirmed that penalty points for late quarterly updates will not apply in the first year for those joining MTD in April 2026, this should not be treated as a reason to delay. Getting into the right routine now will make future quarters much easier.
Step 7: Keep Going After Submission
Your first quarterly update is not the end of the process.
After submission, you should continue to:
- keep records updated regularly
- reconcile transactions each month
- store receipts digitally
- review your figures before the next quarter
- plan ahead for your tax liability
MTD is not a once-a-year task. It is a new way of managing your records throughout the year.
What If You Are Unsure?
If you have downloaded software but are not sure whether it is set up correctly, or if you do not feel confident about your first submission, you are not alone.
Many sole traders and landlords are in the same position.
The key is to ask for help early rather than waiting until the deadline is close.
How Exchange Accountants Can Help
At Exchange Accountants, we are digital accounting specialists and have been helping clients move to cloud-based systems for many years.
We can help you:
- confirm whether MTD applies to you
- check your software setup
- review your first quarterly update
- submit through the correct process
- build a simple routine for future submissions
Making Tax Digital does not need to feel overwhelming. With the right support, it can become a more organised and useful way to manage your finances.
If you would like help preparing for your first quarterly submission, speak to our team today.
📞 028 9263 4135
📧 info@exchangeaccountants.com
🌐 exchangeaccountants.com
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