First MTD for ITSA Quarterly Submission: A Practical Guide for Sole Traders and Landlords

25 April 2026 · 9 min read

MTD for ITSA is now live. As of 6 April 2026, sole traders and landlords with combined business and property income above £50,000 are inside the regime. The first quarter of the new tax year is well underway and the first quarterly submission deadline is 7 August 2026.

If this is your first MTD submission, the rules are not as daunting as the noise around them suggests. The mechanics are simple. The trickier part is getting your records into a state where the submission becomes a five-minute job rather than a fortnight of catching up. This guide explains exactly what you need to file, when, and how to set yourself up so that every quarterly submission feels routine rather than stressful.

The deadlines you actually need to remember

MTD for ITSA quarterly periods follow the tax year. There are four standard quarters and one final declaration each year:

Q1: 6 April to 5 July 2026 — submit by 7 August 2026
Q2: 6 July to 5 October 2026 — submit by 7 November 2026
Q3: 6 October 2026 to 5 January 2027 — submit by 7 February 2027
Q4: 6 January to 5 April 2027 — submit by 7 May 2027
Final declaration: 31 January 2028 — replaces the old self-assessment tax return

The pattern repeats every tax year. Each quarterly update is due one month and seven days after the quarter ends. The final declaration is the proper tax return, where you reconcile the cumulative quarterly numbers, claim reliefs and allowances, and finalise the figures.

You can opt to use calendar quarters instead of fiscal quarters (so quarters end 30 June, 30 September, and so on). The deadlines are still one month and seven days after each period end. Pick whichever aligns with your existing record keeping. Most sole traders find calendar quarters easier because they map onto how they already think about months.

What goes into a quarterly update

A quarterly update is much simpler than a self-assessment return. It is a summary of business income and expenses for the quarter, broken down by HMRC's standard categories. There are no balance sheet items, no accruals or prepayments, no capital allowances, and no adjustments at this stage.

For a self-employed sole trader, you submit:

Total income received during the quarter (or earned during the quarter if you use the accruals basis)
Allowable expenses broken down by category: cost of goods, payments to subcontractors, wages and salaries, car/van/travel, rent/rates/power, repairs, accountancy/legal/professional, interest on bank/other loans, advertising, and other expenses

For a landlord with property income, you submit:

Rental income received during the quarter
Allowable property expenses by category: rent paid, repairs and maintenance, agent and management fees, legal and professional, services such as cleaning or gardening, mortgage interest (which is reported separately for relief calculation), and other property expenses

The figures are cumulative across the year, so each quarterly update sums to the position at quarter end rather than the activity in just that quarter alone. If you make corrections in a later quarter, the cumulative figures move accordingly.

Crucially, accuracy at this stage is "best efforts at the time". HMRC explicitly does not expect quarterly updates to be the final, polished version of the numbers. Adjustments happen at the year-end final declaration. This is a relief if you have been treating each submission as a mini tax return. It does not need to be.

What you need before the first submission

You cannot submit a quarterly update without three things in place:

Digital records. All income and expenses must be recorded digitally. Paper receipts in a shoebox are no longer compliant. The records do not have to be in any particular software, but they must be digital and they must be linked to the submission tool.
MTD-compatible software. You need software that can submit directly to HMRC's MTD APIs. A list of approved software is published at gov.uk/guidance/find-software-thats-compatible-with-making-tax-digital-for-income-tax. Bridging spreadsheets are allowed if the spreadsheet has a digital link to MTD-compatible software.
Sign-up with HMRC. Even if you are mandated, you still need to formally enrol via your HMRC online account. If your accountant manages this, they will need MTD ITSA agent authorisation in place. Do not assume your existing self-assessment authorisation transfers automatically.

If you have not done all three by mid-July 2026, the August deadline becomes uncomfortable. The good news is that bringing records up to date is the longest part. Once that is done, the actual submission takes minutes.

How to get records ready in time

If you have been keeping paper or spreadsheet-only records, the first quarter is the moment to switch. Three approaches work, with very different effort levels:

1. Manual entry into MTD software

You move to a tool like Xero, QuickBooks, FreeAgent, or Briefcase Ledger and enter every transaction yourself. This works for landlords with a handful of transactions per month, or sole traders with a simple business model. Expect to spend two to four hours catching up the first quarter, then 30 to 60 minutes per month going forward.

2. Bank feeds and manual coding

You connect your bank account to the software via Open Banking. Transactions appear automatically and you code each one to the right category. This is the standard approach used by most sole traders. The first quarter takes one to two hours of catch-up coding, then maybe 20 minutes per month thereafter.

3. AI-driven automation

You connect bank feeds and use AI to capture receipts, extract data, and code transactions automatically. You review and approve rather than type. AI bookkeeping tools handle the repetitive work and let you focus only on edge cases. The first quarter takes maybe 30 minutes including setup, then less than 10 minutes per month after that.

For most sole traders earning over £50,000, the AI route is now the cheapest in time terms once you account for the hours saved. If your business has hundreds of transactions per quarter, manual entry simply does not scale.

Briefcase Ledger handles MTD for ITSA end-to-end. Bank feeds, receipt capture, AI categorisation, quarterly submissions, and the final declaration in one place.

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What the actual submission process looks like

Once your records are in MTD-compatible software, the submission itself is straightforward. The flow is broadly the same across every approved tool:

Reconcile the quarter. Make sure every bank transaction has been coded to a category, every invoice has been recorded, and the bank balance in the software matches the bank statement.
Review the summary. The software produces a quarterly summary showing total income, total expenses, and the breakdown by category. Spot-check it against your gut feel for the quarter. Anything that looks off, investigate before submitting.
Submit to HMRC. One click sends the figures directly to HMRC via their API. You receive an acknowledgement reference. That is the submission done.
Save the confirmation. Keep a record of the submission and the figures filed, in case of any later query.

If you spot an error after submitting, you do not need to file an immediate correction. You adjust in the next quarterly submission and the cumulative figures will reflect the change. Material errors that affect tax liability should be discussed with your accountant.

Common mistakes to avoid in the first quarter

The transition to MTD has produced a fairly predictable list of avoidable problems. These are the ones to watch:

Leaving sign-up to the last week. HMRC processing for MTD ITSA agent authorisation can take several days. If your accountant is doing the submission, get this sorted by the start of July at the latest.
Mixing personal and business spending. Every transaction in the business bank feed is going to be coded to a category. If your personal Amazon spend is going through the same account, you will spend the first quarter manually marking dozens of transactions as personal. Open a separate business account before April if you have not already.
Treating each quarterly update as a final return. The submission is a snapshot, not a tax return. Capital allowances, private use adjustments, and reliefs all happen at year-end. Spending hours trying to perfect the quarterly figures is wasted effort.
Ignoring the digital link rule. If you are using a spreadsheet alongside MTD software, the link between them must be digital. Manually retyping figures from one to the other is not compliant. Use formulas, CSV imports, or APIs.
Forgetting about the final declaration. Quarterly updates do not replace the year-end return. You still need to do a final declaration by 31 January after the tax year ends. Block out time for it.

What happens if you miss the August 2026 deadline

HMRC has confirmed it will operate the new MTD penalty regime from day one. Late quarterly submissions earn one penalty point each. After four points (for quarterly filers), HMRC issues a £200 fine. Each subsequent late submission also costs £200. Points expire after 24 months of compliance.

Late payment of tax owed is treated separately. Interest plus a 2% surcharge applies after 15 days of being late, an additional 2% after 30 days, and 4% per annum on the unpaid balance from day 31. We have written a detailed walkthrough of how the points and fines stack in our MTD for ITSA penalties guide.

One missed quarter is not a disaster. Repeat lateness gets expensive quickly. The simplest way to avoid the issue entirely is to set up automated reminders, keep records up to date during the quarter, and submit a few days before the deadline rather than on the day itself.

Where Briefcase Ledger fits in

Briefcase Ledger is built specifically for MTD for ITSA. It is designed for sole traders and landlords who want to do as little manual work as possible to stay compliant. Bank feeds, receipt capture, AI categorisation, quarterly submissions, and the year-end final declaration all happen in one place.

Practically, that means you connect your bank account, snap photos of receipts as you get them, and the AI does the categorisation. When the quarterly deadline rolls around, you review the summary and submit with one click. The same data flows through to the year-end declaration so there is no re-keying.

Briefcase Ledger uses the same AI bookkeeping engine that runs the main Briefcase platform for accounting firms, just packaged for direct use by sole traders. If you already work with an accountant who uses Briefcase, your books and theirs are in sync automatically.

Frequently asked questions

When is the first MTD for ITSA quarterly submission due?

For the first quarter of MTD for ITSA (6 April to 5 July 2026), the submission deadline is 7 August 2026. The same one-month-and-seven-days rule applies to every subsequent quarter. The remaining 2026 to 2027 deadlines are 7 November 2026, 7 February 2027, and 7 May 2027 for the final quarterly update.

What information needs to be in a quarterly MTD for ITSA submission?

Each quarterly update is a summary of business income and allowable expenses for the period, broken down by HMRC's standard expense categories. Sole traders and landlords need to submit cumulative figures for income and each expense type. The submission is not a tax return. It does not require adjustments, accruals, or final accounts. The accuracy required is best efforts at the time of submission, with corrections happening later in the year-end final declaration.

What software do I need for MTD for ITSA?

You need MTD-compatible software that can keep digital records and submit quarterly updates directly to HMRC. Bridging spreadsheets are allowed but only if the spreadsheet links to MTD-compatible software for submission. Most sole traders will use a single platform that does both digital record keeping and submission. Briefcase Ledger is purpose-built for MTD for ITSA, handling bookkeeping, quarterly updates, and the final declaration in one place.

What happens if I miss the first MTD for ITSA submission?

Late submissions accrue penalty points under the new MTD penalty regime. Quarterly updates earn one point each when filed late. After four points (for quarterly filers), HMRC issues a £200 fine, with each subsequent late submission also costing £200. Points expire after a 24-month period of compliance. Late payment of tax owed at the year end is penalised separately, with interest plus a 2% charge after 15 days, an additional 2% after 30 days, and 4% per annum after 31 days.