MTD Q2 Deadline: 7 November 2026 — What UK Sole Traders Need to Do Now

Half of all mandated sole traders and landlords missed their first Making Tax Digital quarterly update. HMRC confirmed that 436,000 of an estimated 864,000 eligible taxpayers filed by the 7 August 2026 deadline — meaning roughly 428,000 people either skipped it entirely or haven't even signed up yet. The second quarterly update deadline is 7 November 2026. If you were in that 50%, or if you filed Q1 but have no idea what comes next, this is your practical guide to what Q2 actually requires — and how to get it done in time.

The good news: Q2 is no harder than Q1. The data you need already exists in your accounting software (or bank account). The submission itself takes minutes, not hours. What catches people out is waiting until the last week of October before thinking about it. The Q2 window opens on 25 September — you can, and should, submit as soon as your October records are in.

Not using MTD-compliant software yet? You can't submit without it.

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TL;DR

• The Q2 MTD period runs from 6 July to 5 October 2026. The deadline is 7 November 2026.
• You can submit from 25 September (or 6 October for most people). Don't wait until November.
• There are no penalty points for missing Q1 or Q2 in 2026/27 — but late payment penalties still apply, and the soft landing ends in April 2027.

What is the MTD Q2 quarterly update?

A quarterly update is not a tax return. It's a short digital summary of your business income and expenses for the period, sent to HMRC through your accounting software. You're not paying tax because of it. You're not finalising anything. HMRC uses the data to calculate a running tax estimate — useful context for your cash flow, not a bill.

The data required is simpler than a tax return: income received, expenses incurred, dates, and HMRC's standard expense categories (advertising, travel, financial costs, etc.). Your software handles the categorisation and the submission. If your records are tidy and your bank feed is connected, the actual submission takes five to ten minutes.

What the quarterly update does not include: PAYE employment income, dividends, savings interest, capital gains, or any income outside your self-employment or property business. Those stay in your final Self Assessment return, due as usual by 31 January 2028.

The Q2 timeline: when can you submit?

The second quarterly period covers 6 July to 5 October 2026 for most sole traders and landlords using the standard tax-year periods. If you elected to use calendar update periods (where your quarters follow whole months rather than the tax year), your period ran from 1 July to 30 September 2026.

*HMRC allows submission up to 10 days before the period ends if you're certain there will be no more transactions in those 10 days.

The practical target for most people is to submit between 6 October and 25 October. That gives you time to resolve any categorisation questions before the November deadline without leaving it to the final week.

What you need to submit Q2

There are two prerequisites. First, you need HMRC-recognised MTD software — not just "MTD-ready" as marketed, but actually recognised and listed on the HMRC website. If you're not sure which category your software falls into, our comparison of MTD-ready vs HMRC-recognised labels explains the difference. Second, you need digital records of your business income and expenses for the period.

Those digital records can be as simple as a connected bank feed with categorised transactions. They don't need to be elaborate. But they do need to cover the full period (6 July to 5 October), and the categories need to align with HMRC's standard expense headings — your software should handle this automatically.

What goes into a Q2 submission:

• Self-employment income: sales, fees, takings, consultancy payments received during the period
• Self-employment expenses: categorised by HMRC's standard headings — materials, travel, office costs, professional fees, advertising, financial charges, repairs and maintenance
• Property income and expenses if you're a landlord (separate update per property business if you have multiple)
• Dates for each income and expense item

What does not go in: PAYE salary, dividends, pension income, savings interest. Those remain in your annual Self Assessment return and are not part of the quarterly submission at all.

If you missed some receipts for July or August, now is the time to add them. Your software can accept backdated entries, and most bank feeds let you go back and categorise historical transactions. Getting Q2 right matters more than getting it done in ten minutes.

The soft landing: penalties in 2026/27 (and why they still matter)

HMRC has confirmed there are no penalty points for missing quarterly update deadlines during the 2026/27 tax year. This applies to Q1 (which was 7 August 2026), Q2 (7 November 2026), Q3 (7 February 2027), and Q4 (7 May 2027).

The soft landing protects you from quarterly submission penalty points only. It does not cover:

• Late payment penalties — if you owe tax and pay late, penalties apply regardless
• Late Final Declaration — the digital equivalent of your Self Assessment return, due 31 January 2028, is not covered by the soft landing
• Failure to keep digital records — the record-keeping obligation is live from April 2026

From 6 April 2027, the soft landing ends and a points-based penalty system begins. Miss one quarterly deadline: one point. Miss four: a £200 fixed penalty. Points reset after a period of compliance. This is not a theoretical risk — it's a system that will be enforced from next April, and it catches people who built the habit of filing late in 2026/27 thinking the leniency would continue.

The other reason not to rely on the soft landing: HMRC will use your quarterly submission data to calculate an in-year tax estimate. Filing on time gives you an accurate picture of your tax liability before it becomes a January shock. If Q1 and Q2 go unfiled, you're operating blind on a number that might include a meaningful payment on account.

What if you haven't signed up for MTD yet?

As of 12 August 2026, HMRC confirmed that over 570,000 taxpayers had signed up for MTD for Income Tax — against an estimated 864,000 who are legally required to use it. That means roughly 294,000 people who should be using MTD have not yet registered.

From September 2026, HMRC has begun signing up those who haven't registered themselves, in stages. If you receive a letter from HMRC telling you you've been signed up, you will need to act on it — HMRC has stated that guidance for this process was published in late August 2026.

If you haven't signed up and you're earning over £50,000 from self-employment and/or property, do not wait for HMRC's letter. Sign up yourself at GOV.UK, choose your software, and connect your bank feed. Signing up yourself lets you set your details correctly from the start, rather than working with whatever HMRC has populated. If you're unsure whether your income level requires MTD, check the thresholds: over £50,000 in the 2024/25 tax year means you're in scope for 2026/27; over £30,000 means you're in scope from April 2027.

From April 2027, the £30,000 threshold means a significant new cohort of sole traders — lower-earning freelancers, consultants, and small landlords — will be mandated. If you're in that band now, getting your software and habits in place during the 2026/27 soft landing is materially easier than scrambling when it becomes mandatory.

Which software do you need?

You cannot file an MTD quarterly update through the HMRC website, through a spreadsheet alone, or through software that isn't HMRC-recognised. The recognised list is available at GOV.UK and includes full accounting platforms and bridging software.

The main options for sole traders and landlords:

• Full accounting software (Xero, FreeAgent, QuickBooks, Sage, Zoho Books, Clear Books, QuickFile): manages your books throughout the year and submits quarterly updates directly to HMRC. Most also handle the Final Declaration. These are the right choice if you have active bookkeeping needs. See our comparison of the best sole trader accounting software.
• Bridging software (VitalTax, 123 Sheets, AbraTax): takes your spreadsheet data and submits it to HMRC. Works if you're committed to managing your books in Excel or similar and don't want to migrate to a full accounting platform. Costs from £24/year. Our review of MTD bridging software for 2026 compares the three main options on price, usability, and workflow fit.
• App-based tools (ANNA Money, Sage Sole Trader free, Starling Accounting): lower-barrier entry points. Some handle quarterly updates but may not have a full chart of accounts — relevant if you have complex expenditure like fixed asset additions or mortgage interest. Check the limitations before committing.

One thing to know about your software and Q2: the quarterly update data is cumulative. HMRC stores each submission, so your Q2 update builds on the Q1 data already submitted. If you used one piece of software for Q1, you can switch for Q2 — but you'll need to import or re-enter your Q1 transactions so the software has a complete picture of the year so far.

Step-by-step: submitting your Q2 update

Here's what the process looks like in a typical full accounting platform. The steps vary slightly between tools but the sequence is consistent:

1. Ensure your Q2 records are complete. Log all income received and expenses incurred between 6 July and 5 October 2026. If you use a bank feed, review and categorise every transaction in that window. Check for any cash transactions or expenses paid through personal accounts that aren't captured in the feed.
2. Reconcile your accounts. Match transactions to invoices and receipts where relevant. Your software should show you any unreconciled items. This doesn't need to be perfect — you're not filing a final return — but it should be broadly complete.
3. Navigate to the MTD or Tax section. In Xero, this is under Accounting → Tax → MTD. In FreeAgent, it's the Tax Timeline. In QuickBooks, it's under Taxes. In most platforms, you'll find a dedicated MTD area with the quarterly periods listed.
4. Review the period summary. Your software will pull together your income and expenses for the Q2 window and present them in HMRC's reporting categories. Check that the numbers look right. A gross error here — a £10,000 expense categorised as income, for example — is worth correcting before you submit.
5. Submit to HMRC. Most platforms send the submission directly from within the software after you confirm. You should receive confirmation within minutes, typically a reference number and a timestamp from HMRC.
6. Save your confirmation. Store the submission reference in your records. If there's ever a query from HMRC, this is your proof of filing.

If you're using bridging software with a spreadsheet, the process differs at steps 3 and 4 — you'll be exporting your data into the bridging tool's template rather than using an in-app review screen. But the submission step is equivalent.

The right approach for different situations

You filed Q1 on time and your software is set up: Log in, categorise October transactions once the period ends, review the Q2 summary, and submit in October. Done.

You missed Q1 and haven't submitted it yet: Submit Q1 now — there's no deadline penalty in 2026/27. Then set up a reminder to submit Q2 in the first two weeks of October. Two submissions, same process.

You're using full accounting software but haven't connected a bank feed: Connect it before 6 October so you have clean, categorised transaction data for the whole Q2 period. Most platforms do this in under five minutes via Open Banking.

You're still on a spreadsheet and haven't chosen bridging software: VitalTax (£36/year, Excel add-in), 123 Sheets (from £23.70 for year one, browser-based), and AbraTax (£50/year, best for agent workflows). Any of these will let you submit Q2 through your existing spreadsheet — choose based on whether you use Excel or another tool, and whether your accountant needs access.

You haven't signed up for MTD at all: Do it at GOV.UK now, before HMRC signs you up in September. Choose your software at the same time so it's authorised and connected before the Q2 window opens in October.

You're a landlord with multiple properties: You may need to submit a separate quarterly update for each property business. Check whether your software handles this — some platforms have per-property reporting built in, others treat all property income as a single entity.

What happens with Q3 and Q4 after this?

After Q2, the remaining quarterly deadlines for 2026/27 are:

• Q3 — period: 6 October to 5 January 2027, deadline: 7 February 2027
• Q4 — period: 6 January to 5 April 2027, deadline: 7 May 2027
• Final Declaration (digital Self Assessment) — deadline: 31 January 2028

The Final Declaration is your year-end submission. It covers everything that doesn't go in the quarterly updates — PAYE income, dividends, savings interest, capital gains, pensions, relief claims — plus a review and sign-off of your quarterly data. It replaces the paper Self Assessment return for MTD taxpayers. The deadline is the same as before: 31 January. The mechanism is different — it's filed through your MTD software rather than the HMRC website.

Frequently asked questions

Can I submit Q2 before 6 October?

Yes, if you're confident there will be no more business transactions before the end of the period (5 October). HMRC allows submission up to 10 days early — so from 25 September. For most people, submitting on 6 October or shortly after is the practical target.

Does filing late in 2026/27 affect my 2027/28 position?

There are no penalty points in 2026/27, so late filings this year don't create points that carry over to 2027/28. But they don't build a compliance record either. The points system resets with the new tax year in April 2027 — everyone starts with zero points regardless of 2026/27 behaviour.

What happens if my income is wrong in the quarterly update?

You can submit a revised update before the deadline. After the deadline, corrections typically go into the Final Declaration at year end. A quarterly update is not binding in the way a tax return is — if you discover an error, note it and address it when you have the correct figures, at the latest in the Final Declaration.

My accountant handles my Self Assessment. Do they also do my quarterly updates?

That depends on your arrangement. Some accountants are taking on quarterly updates as part of their service; others are leaving them to clients who now use MTD software directly. Worth confirming with your accountant before Q2 opens. If they are handling it, make sure your records are clean and accessible to them well before 25 October.

Do I need to file a Q2 update if I had no income or expenses in the period?

Yes. A nil return still needs to be submitted if you are within the scope of MTD for Income Tax. Zero income and zero expenses is a valid submission — it just confirms to HMRC that no activity occurred in that quarter.

Related Reading

• MTD ITSA Soft Landing 2026/27: What It Covers, What It Doesn't, and Why It Matters Now
• Best MTD Software for UK Sole Traders (2026): The Complete Guide
• What Is Making Tax Digital? The Complete Guide for UK Small Businesses (2026)

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