Your First MTD Quarterly Update — Step by Step
What the software asks for, what to leave for the final declaration, the five first-quarter mistakes, and what to do if you missed Q1.
The short answer
Your first update is a category summary, not a tax return. Total the rent received and the expenses paid in the quarter by HMRC category, confirm them in compatible software, and submit by the 7th of the month after the quarter plus one — for Q1 2026/27 that was 7 Aug 2026; Q2 is due 7 Nov 2026. No adjustments, no Section 24 arithmetic, no payment.
If HMRC has just auto-enrolled you, this is the page: what the software is asking for, what to leave for the final declaration, and the mistakes that create work later.
Before the first update
- Sign up (or confirm HMRC’s enrolment) through your Government Gateway — you need your UTR and National Insurance number.
- Pick one compatible product from HMRC’s list and authorise it to connect to your HMRC account. One product per income source.
- Choose the period type — standard (from 6 April) or calendar quarters — before the first update.
- Set up digital records. A spreadsheet with a bridging tool counts, provided no figures are re-typed between the records and the submission.
What goes in the update
| Category | What to include |
|---|---|
| Income | Rent and other property income received in the period (cash basis default) |
| Premises running costs | Council tax, utilities, insurance, ground rent, service charges |
| Repairs and maintenance | Revenue repairs only — capital improvements stay out |
| Legal, management and professional fees | Agent, accountant, legal fees for the tenancy |
| Residential finance costs | Mortgage interest and arrangement fees — recorded, not deducted; the credit is applied at the final declaration |
| Travel, other costs | Mileage at HMRC rates, phone, software, other allowable items |
| Cost of replacing domestic items | Like-for-like replacements of furniture and appliances |
What to leave for the final declaration
- The Section 24 tax reduction and its caps
- The choice between actual expenses and the £1,000 property allowance
- Losses brought forward, rent-a-room elections, capital allowances (rare for dwellings)
- Any accruals adjustments if you have opted out of the cash basis
Five first-quarter mistakes
- Reporting net rent from the agent statement. Report gross rent and the fee as an expense — netting understates the income that decides your threshold.
- Deducting mortgage interest as an expense. It is a finance cost; software has a separate box for a reason.
- Including the boiler you replaced as capital, or the extension as a repair. The repair/improvement line matters from the first quarter.
- Splitting joint property 50/50 when the beneficial shares differ — or the reverse.
- Panicking about a missed Q1. Updates are cumulative: include April–June in your Q2 figures, and for 2026/27 there are no quarterly points anyway.
After you submit
Most software shows a running tax estimate. Treat it as indicative — it will not include the Section 24 credit or your allowance choice until the final declaration. Keep the submission receipt; HMRC’s confirmation is your evidence of an on-time update.
gov.uk “Use Making Tax Digital for Income Tax” (sign-up, software authorisation, quarterly update content); HMRC digital record-keeping notice; category list per HMRC MTD API property business schema. Checked 2026-08-29, re-checked 31 Aug 2026.
Quick answers
Totals of rent received and expenses paid in the quarter, by HMRC category, from your digital records. No tax adjustments and no payment.
It is recorded in the residential finance-costs category but not deducted. The Section 24 credit is applied at the final declaration.
Include the missing period in your next update (they are cumulative). For 2026/27 late quarterly updates earn no penalty points.
Yes, with bridging software that submits from it. The rule is that figures must not be manually re-typed between your records and the submission.