If you were required to send a first quarter update to HMRC last August under the new ‘Making Tax Digital for Income Tax’ system, then your second quarterly update is due by 7 November 2026, as shown in HMRC’s current timetable.
In common with the first update, this update is not another tax return, and it does not create an extra tax payment date. It is a summary of the income and expense records held in your compatible software in the year to date. So, the figures submitted are cumulative and will include those submitted in the first quarter.
For most affected sole traders and landlords, the second update covers the period from 6 April to 5 October. If you use calendar update periods, it covers 1 April to 30 September. In both cases, the submission deadline is 7 November.
Here is a practical checklist to help you prepare.
Check That Making Tax Digital Applies to You
HMRC had indicated that around 864,000 sole traders and landlords would need to use MTD from April 2026. By August, more than 570,000 had signed up and more than 436,000 had successfully submitted their first quarterly update.
If you are expected to use MTD and should have signed up but have not done so, HMRC has announced that it will start signing up taxpayers who are in scope.
If HMRC signs you up for MTD, you are immediately obliged to meet the submission deadlines. From years of experience, it is always better to go to HMRC before they come to you.
A quick reminder: Making Tax Digital for Income Tax began in April 2026 for some sole traders and landlords. You normally need to use it this year if your 2024/25 Self Assessment tax return showed more than £50,000 of qualifying income from self-employment and property combined.
Qualifying income means gross income before expenses. It does not include PAYE employment income, dividends or pension income when HMRC works out whether you are over the threshold.
You should already be registered for Self Assessment, using compatible software and signed up for Making Tax Digital. If you are unsure whether HMRC expects an update from you, check before assuming that the rules do not apply. Different rules or exemptions can apply in some circumstances.
Our wider Making Tax Digital guide explains the general rollout. This article concentrates on the checks to make before the November update.
Understand What the Second Update Includes
Each quarterly update is cumulative. This means the second update includes totals from the start of the tax year to the end of the second update period, rather than reporting only the latest three months.
For standard update periods, that means:
- The first update covered 6 April to 5 July 2026 and was due by 7 August 2026.
- The second update covers 6 April to 5 October 2026 and is due by 7 November 2026.
For calendar update periods, the second update covers 1 April to 30 September, with the same 7 November deadline.
Your software sends totals for the income and expense categories used in your records. HMRC does not receive each individual invoice or receipt as part of the update.
1. Confirm the Right Businesses and Income Sources Are Included
Start by checking which income sources need their own update.
If you have more than one sole trader business, HMRC requires separate digital records and a separate quarterly update for each business. Property income (including Rent a Room) is also handled separately from self-employment income.
For example, someone who runs a gardening business and also works as a self-employed driving instructor should not combine both activities into one set of quarterly totals. A landlord with a separate sole trader business will also have more than one income source to consider.
Check that:
- Every relevant sole trader business is set up separately
- Property income is recorded in the correct place
- A business that started or stopped during the quarter has been dealt with correctly
- The accounting and update periods in the software are the ones you intend to use
If your setup does not look right, ask your accountant or software provider before submitting. Changing the underlying setup after an update has been sent can create avoidable work.
2. Make Sure Your Software Is Ready to Submit
Compatible software needs to hold or receive your digital records and connect them to HMRC.
You may use one accounting package for everything, or a combination of products. A spreadsheet can still form part of the system, but it must be digitally linked to suitable bridging software for the update and eventual tax return. HMRC explains the options in its guidance on compatible software.
Before the deadline, check that:
- Your software subscription and Making Tax Digital function are active
- The correct HMRC account and business are connected
- Any agent authorisation is in place
- Bank feeds are up to date
- Imports or spreadsheet links are working
- You know who will press submit and who will approve the figures first
A bank feed saves time, but it does not decide whether a transaction has been recorded or categorised correctly. Responsibility for accurate records still sits with the taxpayer.
3. Reconcile the Income You Have Received
Compare the sales and income in your software with the source records for the business. Depending on how you trade, this could include invoices, till reports, booking systems, payment processors and bank receipts.
Look for:
- Sales paid into a personal account
- Cash takings that have not been entered
- Card or marketplace income recorded net of fees instead of at the correct gross amount
- Duplicate invoices or duplicated bank-feed entries
- Credit notes and refunds that have not been matched
- Transfers between your own accounts that have been treated as sales
- Income received near the end of September or early October that has not yet appeared in the records
The aim is not to make tax adjustments at this stage. It is to make sure the underlying digital record of business income is complete and accurate.
4. Review Expenses and Their Categories
Next, work through the business expenses recorded from the start of the tax year.
Make sure receipts and invoices have been captured, particularly where something was paid in cash or from a personal account. Check that personal spending has not been included as a business cost and that mixed-use items only include the appropriate business element.
Common areas to review include:
- Motor and travel costs
- Software and subscriptions
- Stock and materials
- Telephone and internet costs
- Professional fees
- Equipment purchases
- Working-from-home costs
- Bank charges and payment-processing fees
You do not need to make every accounting or tax adjustment before sending a quarterly update. Those adjustments are dealt with when the final tax position is prepared. The records themselves should still be complete, correctly dated and placed in a sensible category.
5. Correct Mistakes From the First Quarter
The cumulative system means the second update can reflect corrections made to records from the first quarter.
If you find an invoice that was missed in May or an expense that was entered twice in June, correct the digital record as soon as possible. The revised amount will be included in the next cumulative update, so you do not normally need to resend the first update.
This is one reason to review the full period from April, not only the most recent three months.
Keep a note of any material correction and why it was made. A short audit trail can save a lot of time if the same transaction is queried later.
6. Check What the Estimate Does and Does Not Tell You
After sending an update, your software may show an estimated tax position. Treat it as a useful indication, not a final bill.
The estimate may not yet reflect every source of income, relief, allowance or year-end adjustment. Its usefulness also depends on the records and other information available to the software.
Use the estimate to support cash planning, but do not assume it is the exact amount you will pay. The normal 31 January tax return and payment timetable still applies.
If the estimate looks unexpectedly high or low, investigate rather than ignoring it. Check the period, duplicate transactions, missing costs, other income and the assumptions in the software.
7. Submit Even If There Was No Activity
If a relevant business had no income and no expenses during the latest update period, you still need to send an update to HMRC.
Because the updates are cumulative, check what the software is reporting before you submit. A quiet second quarter does not necessarily mean the cumulative figures will be zero.
Once the update has been sent:
- Save or note the submission confirmation
- Keep the supporting digital records
- Record who approved and submitted it
- Note any questions that need to be resolved before the next update
- Add the next deadline, 7 February 2027, to the calendar
What If You Miss the 7 November Deadline?
HMRC says it will not apply penalty points for late quarterly updates during the 2026/27 tax year. This is a first-year easement, not a reason to leave the update unfinished. The position is set out in HMRC’s quarterly-update guidance.
You still need to send the required quarterly updates before you can submit the tax return for the year. Late tax-return and late-payment rules are separate, and quarterly-update penalty points are due to apply after the first year.
If you know you will miss the deadline, speak to your accountant promptly and get the records up to date rather than allowing the problem to roll into the next quarter.
Your 7 November MTD Checklist
Before you approve the update, confirm that:
- ☐ Making Tax Digital applies to you for 2026/27, and you have signed up if required
- ☐ Every relevant business and property income source is included
- ☐ The correct update period is selected
- ☐ Your compatible software is connected to the right HMRC account
- ☐ Bank feeds, imports and spreadsheet links are current
- ☐ Sales and other business income have been reconciled
- ☐ Expenses have been captured and personal items removed
- ☐ Errors from the first quarter have been corrected in the digital records
- ☐ You understand that the tax estimate is not the final bill
- ☐ The update has been approved, submitted and recorded
Help With Making Tax Digital in Salisbury
The quarterly update should be a summary produced from records you already trust, not a last-minute reconstruction of the previous six months.
Caboodle’s enthusiastic team works with sole traders and landlords across Salisbury and Wiltshire on bookkeeping, sole trader accounts and the wider tax and accountancy support behind reliable MTD records. We keep the process practical and explain the figures and deadlines in plain English.
If your 7 November update is approaching and you are not confident that the records are complete, see how we work with clients or get in touch for a no-pressure conversation before submitting.