If you're a landlord now inside Making Tax Digital for Income Tax, the quarterly update is the bit that causes the most confusion. People assume it's four mini tax returns. It isn't.
A quarterly update is a short, running summary of your rental income and expenses. It's meant to be quick, and most of the tax-saving detail happens later, not in the quarter.
This guide walks through exactly what you put in a landlord's quarterly update, what you deliberately leave out, and where the rest of it goes. It's written for landlords who've crossed the qualifying-income threshold and want to get the first one right.
What is an MTD quarterly update for landlords?
A quarterly update is a digital summary of your property income and expenses for the year so far, sent to HMRC from compatible software four times a year. It is not a tax calculation and it does not finalise anything. The actual tax is worked out at the final declaration after the tax year ends.
Making Tax Digital (MTD) for Income Tax became mandatory from 6 April 2026 for sole traders and landlords whose qualifying income is over £50,000. The £30,000 tier follows from April 2027, and the £20,000 tier from April 2028, per HMRC's eligibility guidance.
Qualifying income here is your gross income (turnover before expenses) from self-employment and property added together. Employment, pension and dividend income don't count toward the threshold, although they're still reported at the final declaration. HMRC confirms this on its qualifying income guidance: "Your qualifying income is the total income you get in a tax year from self-employment and property."
If you let property as a landlord, this is squarely aimed at you. Our page for landlords covers the wider picture of how we help with property tax.
What do you include in a quarterly update?
You include the totals of your property business income and expenses for the year to date, broken down by the same categories you already see on a Self Assessment property page. HMRC's software-driven model adds up your digital records into a total for each category.
For a typical residential landlord, the income side covers:
- Rent received from tenants
- Any other property income, such as ground rents you receive, or charges to tenants for services
The expense side uses the standard property categories, for example:
- Repairs and maintenance
- Property insurance
- Letting agent and management fees
- Legal and professional costs
- Rent, rates, ground rents and services you pay out
- Other allowable property expenses
If your property turnover is below the VAT registration threshold of £90,000, HMRC lets you report most costs as a single consolidated expenses figure instead of splitting every category, which keeps the quarterly update light. Many landlords still prefer the full breakdown so the year-end is cleaner.
The point to hold onto: a quarterly update is a summary of figures, not a return. You're not claiming reliefs, not adjusting for private use, and not declaring any other income at this stage.
What do you leave out of a quarterly update?
Plenty. This is where landlords over-engineer the quarter. You do not include:
- Your residential mortgage or loan interest as a deducted expense. Finance costs on residential lettings aren't deducted from rental profit. They're handled separately as a basic-rate tax reduction at the final declaration (more on this below).
- Reliefs, allowances and adjustments. The property income allowance, the trading allowance, capital allowances and any private-use adjustments are dealt with at the final declaration, not quarter by quarter.
- Non-property income. Employment, pensions, dividends, interest and capital gains have no place in a property quarterly update. They get reported at the final declaration.
- Accountancy-style accruals and provisions. Quarterly figures can be a straightforward summary of what's gone in and out. Estimates are acceptable because you correct everything at the final declaration.
- A tax bill. There's no payment due with a quarterly update. Your Self Assessment payment dates don't change: the balancing payment is still due by 31 January after the tax year, with payments on account on 31 January and 31 July where they apply.
In short, the quarter is the raw income-and-expenses summary. The clever tax work is parked for the final declaration.
Are quarterly updates cumulative or four separate returns?
They're cumulative. Each update is a year-to-date total from 6 April, not a standalone three-month return.
That's the single biggest mental shift. Under the current MTD design, every quarterly submission restates the totals for the whole year so far. So your second update covers 6 April to the end of Q2, your third covers 6 April to the end of Q3, and so on. HMRC's developer service guide is explicit that "all periods start from 6 April" and that a later cumulative submission can satisfy an earlier quarter's obligation.
The practical upside: if you got a figure wrong in Q1, you don't file a correction. You simply put the right cumulative number in the next update and it overwrites the position. Nothing is locked in until the final declaration.
What are the quarterly update deadlines?
For the standard quarters, the four deadlines fall on the 7th of the month after each quarter ends. HMRC's MTD campaign site lists them as 7 August, 7 November, 7 February and 7 May.
| Standard quarter | Period covered (cumulative from 6 April) | Update deadline |
|---|---|---|
| Quarter 1 | 6 April to 5 July | 7 August |
| Quarter 2 | 6 April to 5 October | 7 November |
| Quarter 3 | 6 April to 5 January | 7 February |
| Quarter 4 | 6 April to 5 April | 7 May |
There's also a calendar-quarter option. If you'd rather work to month-ends, you can elect (before your first update of the year) to use periods ending 30 June, 30 September, 31 December and 31 March. The deadlines stay the same: 7 August, 7 November, 7 February and 7 May.
On penalties, HMRC's penalties guidance confirms a points-based late-submission system applies to quarterly updates and the final declaration: you collect a point per missed deadline, and at four points you face a £200 penalty. HMRC has stated there are no penalties for missing a quarterly update deadline specifically for the 2026 to 2027 tax year, the first year of mandation. Treat that as a one-off easing, not a reason to skip updates, because the habit and the digital records still need to be in place.
How is UK property different from foreign property?
For MTD, all your UK property is treated as one single UK property business. You don't file a separate update per flat or per house. You pool the lot into one UK property total.
Foreign property is separate. HMRC's digital records guidance lists three distinct record categories: self-employment, UK property, and foreign property. So a landlord with a UK portfolio and a holiday flat abroad keeps two property businesses going, each with its own digital records and its own quarterly updates.
If you own a property jointly, your qualifying income and your reported figures are based on your share of the gross rents, not the whole property's rent.
Illustrative example: a two-flat landlord's first two quarters
Illustrative example. Priya is a landlord with two UK flats. She's mandated into MTD for 2026/27 and uses the standard quarters. Her figures build up cumulatively from 6 April.
By the end of Quarter 1 (6 April to 5 July), she records:
| Q1 cumulative (to 5 Jul) | Amount |
|---|---|
| Rent received | £9,000 |
| Repairs and maintenance | £600 |
| Property insurance | £180 |
| Letting agent fees | £900 |
| Ground rent and service charges | £200 |
| Total expenses | £1,880 |
Her Q1 update, due by 7 August, simply reports income of £9,000 and expenses of £1,880. No tax, no reliefs.
By the end of Quarter 2 (still measured from 6 April, to 5 October), the totals have grown:
| Q2 cumulative (to 5 Oct) | Amount |
|---|---|
| Rent received | £18,000 |
| Repairs and maintenance | £950 |
| Property insurance | £360 |
| Letting agent fees | £1,800 |
| Ground rent and service charges | £400 |
| Total expenses | £3,510 |
Her Q2 update, due by 7 November, reports the cumulative £18,000 income and £3,510 expenses. It's the whole year so far, not just July to September.
Notice what's missing. Priya pays mortgage interest on both flats, say £4,000 by this point. That figure does not get deducted in these expense totals. It's tracked separately and relieved as a basic-rate tax reduction at the final declaration. Her personal allowance, any other income, and her property income allowance decision are all left for the final declaration too.
Where do mortgage interest and reliefs go?
This trips up almost every residential landlord moving into MTD. Since the finance cost rules changed, mortgage and loan interest on residential lettings isn't an expense that reduces your rental profit. Instead, you get a tax reduction worth 20% of the lower of your finance costs, your property profits, or your income above the personal allowance.
So in the quarterly update, you don't bury mortgage interest in the expenses total. You keep a digital record of it, and the relief is applied when the tax is calculated, which happens at the final declaration. Your software will usually have a dedicated box for residential finance costs so they don't get mixed in with deductible costs.
The same logic applies to the property income allowance and any capital allowances. They're claimed at the final declaration, where the actual tax position is worked out, not spread across the four quarters.
If your finances span lettings and other income and you want this set up correctly from the first quarter, our self-assessment service handles the MTD transition end to end.
What about the final declaration?
The final declaration is what replaces your old Self Assessment tax return. After the tax year ends, you confirm your final property figures, add any other income such as employment or dividends, claim your reliefs and allowances, and the tax is calculated.
It's due by 31 January after the end of the tax year, the same date Self Assessment returns have always used. So for 2026/27, the final declaration deadline is 31 January 2028.
This is the moment everything you left out of the quarterly updates comes back in: mortgage interest relief, the property income allowance, your personal allowance, other income, and any adjustments. The quarters feed the numbers; the final declaration turns them into a tax bill.
Get the quarterly updates right and the final declaration becomes a tidy confirmation rather than a scramble.
Frequently asked questions
Do I include mortgage interest in my landlord quarterly update?
Not as a deducted expense. Residential finance costs aren't deducted from rental profit. You keep a digital record of the interest, and it's relieved as a basic-rate (20%) tax reduction at the final declaration, not quarter by quarter.
Are MTD quarterly updates four separate tax returns?
No. Each update is a cumulative year-to-date summary of your income and expenses from 6 April. A later update restates the whole year so far, so you don't file corrections, you just put the right cumulative figure in the next one.
What are the four quarterly update deadlines?
For standard quarters they're 7 August, 7 November, 7 February and 7 May. If you elect to use calendar quarters ending 30 June, 30 September, 31 December and 31 March, the deadlines stay exactly the same.
Do I report my other income in the quarterly update?
No. Employment, pensions, dividends, interest and capital gains aren't part of a property quarterly update. They're reported at the final declaration after the tax year ends.
Is all my rental property one business for MTD?
Your UK property is treated as a single UK property business, so you pool all UK lets into one set of updates. Foreign property is a separate business with its own digital records and updates.
Will I be penalised for a late quarterly update in 2026/27?
HMRC has said there are no penalties for missing a quarterly update deadline in the 2026 to 2027 tax year. A points-based late-submission system applies after that, so it's worth building the habit from the start.
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Talk to a Zmartly accountant about your MTD quarter
Moving your lettings onto Making Tax Digital doesn't have to be painful. We'll get your digital records, software and first quarterly update set up so the numbers flow straight through to your final declaration. Book a free call with a Zmartly accountant and we'll handle the transition for you.
