TL;DR: Q2 runs from 6 July to 5 October 2026, with an MTD submission deadline of 7 November 2026. However, your Q2 update must include cumulative income and expense totals, so from 6 April to 5 October. Keep the date, amount, and category of each transaction digitally. You can use a spreadsheet with HMRC-compatible bridging software such as AbraTax.
This guide is for sole traders and landlords using Making Tax Digital for Income Tax for the 2026/27 tax year. The blog includes digital records for self-employment and UK property income, plus short notes on foreign property income. If your circumstances are more complex, speak to a qualified tax adviser.
If you submitted your first quarterly update, the hardest part is already behind you. If you missed it, you can still catch up during 2026 to 2027 without receiving a penalty point for a late quarterly update, and the second quarterly update can cover both at once.
This post is your reference guide for what records HMRC needs you to keep, how to structure them, what income and expenses to track, and how AbraTax's bridging templates connect your spreadsheet to HMRC
Haven't completed your Q1 update yet? That is fine. HMRC will not apply penalty points for late quarterly updates for the 2026 to 2027 tax year because the second update contains cumulative figures. Sending it can satisfy the outstanding first and second quarterly update obligations. Here is exactly what you need to do.
MTD Q2 dates and deadline
There is an important distinction to understand here, and it catches people out even after Q1. The second quarterly record-keeping period runs from 6 July to 5 October 2026, so you are tracking the income you receive and the expenses you pay between those dates. The update you submit to HMRC covers 6 April to 5 October 2026, and each quarterly update contains cumulative year-to-date totals, not just the three months that just passed.
The submission deadline is 7 November 2026. For calendar update periods (1 April to 30 September), the same deadline applies.
Here is a practical example of what cumulative means. Say you are a freelance copywriter. In Q1, you earned £9,000 and spent £600. Your first update showed the cumulative figures from 6 April to 5 July. In Q2, you earn another £11,000 and spent another £800. Your Q2 submission does not show £11,000 and £800. It shows £20,000 income and £1,400 expenses: the running total from 6 April through 5 October. Your Q2 records built on what you already have.
| Update Quarter | Record-keeping period | Submitted cumulative period | Deadline |
|---|---|---|---|
| Q1 | 6 Apr - 5 Jul | 6 Apr - 5 Jul | 7 August 2026 |
| Q2 | 6 Jul - 5 Oct | 6 Apr - 5 Oct | 7 November 2026 |
| Q3 | 6 Oct - 5 Jan | 6 Apr - 5 Jan | 7 February 2027 |
| Q4 | 6 Jan - 5 Apr | 6 Apr - 5 Apr | 7 May 2027 |
Source: GOV.UK - Making Tax Digital for Income Tax dates
For a full explanation of how cumulative reporting works and what the year-end tax return involves. Read our MTD Income Tax explainer.
What must a digital record include?
For each income or expense transaction, HMRC generally requires three things:
- The amount
- The transaction date (that is, the date income was received or the expense was incurred. The correct date may depend on your accounting method)
- The category
You do not normally upload individual receipts or invoices with the quarterly update; however, you should retain the supporting evidence you would normally need under standard tax recording and record-keeping rules. Businesses with different structures or circumstances (for example, retailers or jointly held properties) may have specific rules that apply to them.
Your records must also be digitally linked where you use separate record-keeping software and bridging software for submission.
A row in a spreadsheet satisfies the basic requirement. AbraTax's example record uses five columns:
- Date
- Description
- Type
- Category
- Amount
| Date | Description | Type | Category | Amount (£) |
|---|---|---|---|---|
| 07/07/2026 | Adobe subscription | Expense | Office, stationery and admin costs | 54.99 |
| 10/07/2026 | Client invoice - July project | Income | Turnover / sales income | 2,400.00 |
| 15/07/2026 | Train to client meeting | Expense | Car, van, travel expenses | 34.50 |
Download AbraTax's free example self-employment digital records to see a full year of correctly structured records, or the example UK property records if you let property.
What income should sole traders record?
HMRC uses two income categories for self-employment.
| AbraTax income category | What goes here |
|---|---|
| Turnover/sales income | Your core business income like takings, fees, sales, client invoices |
| Other business income | Relevant business income that is not part of ordinary turnover, where it falls within HMRC's other business income category |
The correct category depends on the nature of the payment. If you are unsure, check the relevant Self Assessment guidance or speak to an accountant.
One thing to know is that quarterly updates only cover self-employment and property income. Pensions, savings interest, dividends and employment income are not part of any quarterly update. They go into your year-end tax return only.
What income should landlords record?
Property income is tracked separately from self-employment income. If you have both, keep separate records for each and submit them separately.
| AbraTax property income category | What goes here |
|---|---|
| Total rental income for the period | All rent received before any deductions, residential or commercial |
| Rent-a-Room income | Only if you are letting a furnished room in your own home under Rent-a-Room relief |
| Other rental income | Income from services provided to tenants |
| Premiums received for granting a lease | A lump sum received for granting a new lease |
All UK properties are normally treated as one UK property business, so landlords do not usually need separate quarterly updates for each UK property. Foreign properties require separate digital records for each property, although the software combines them into the foreign property business update.
What business expenses should you record?
Self-employed expenses
If you use full categorisation, your quarterly totals follow HMRC Self Assessment income and expense categories mapped directly to the SA103F form. The categories below describe how figures are grouped for reporting. Whether an expense is tax deductible depends on the nature of the cost and the relevant tax rules. Including a cost in a digital record does not automatically make it allowable.
| AbraTax expense category | What goes here |
|---|---|
| Cost of goods | Goods or materials bought for resale, or used directly in delivering your work |
| Payments to subcontractors | Amounts paid to subcontractors (for example under CIS), before tax deductions |
| Wages and staff costs | Gross wages, salaries, bonuses, employer NICs and pension contributions |
| Car, van, travel expenses | Business travel costs (see vehicle costs note below) |
| Premises running costs | Rent, utilities, business rates, insurance and other running costs for business premises |
| Repairs and maintenance costs | Repairs and maintenance of premises, vehicles or equipment ( not improvements) |
| Office, stationery and admin costs | Phone, broadband, stationery, software subscriptions and general office costs |
| Advertising and marketing | Advertising, website costs, business listings and promotional expenses |
| Business entertainment | Client entertaining note: this is normally not allowable for tax (GOV.UK: business expenses) |
| Interest on bank and other loans | Interest on business loans, overdrafts or credit used for the business |
| Finance charges | Bank charges, credit card fees and similar finance costs |
| Bad debts written off | Trade invoices written off because a client did not pay, subject to HMRC conditions. This will not normally apply where income is recorded using the cash basis because unpaid income has not been included as turnover. |
| Professional fees | Accountancy, legal and other professional fees relating to the business |
| Depreciation | Accounting depreciation - not allowable tax expense; eligible capital expenditure may qualify for capital allowance, which is dealt with when finalising the business's taxable profit. |
| Other business expenses | Any other allowable costs not covered above |
Vehicle costs: Eligible sole traders using simplified vehicle expenses may calculate car or goods vehicle costs at 55p per business mile for the first 10,000 miles in 2026 to 2027 tax year and 25p per mile thereafter. Motorcycle rate is 24p per mile.
Alternatively, they may claim the allowable business proportion of actual vehicle costs, subject to HMRC's rules. You cannot use simplified mileage for a vehicle if you have already claimed capital allowance for it or included it when calculating actual business expenses.
UK property expenses
| AbraTax expense category | What goes here |
|---|---|
| Cost of goods | Goods or materials bought for resale, or used directly in delivering your work |
| Payments to subcontractors | Amounts paid to subcontractors (for example under CIS), before tax deductions |
| Wages and staff costs | Gross wages, salaries, bonuses, employer NICs and pension contributions |
| Car, van, travel expenses | Business travel costs (see vehicle costs note below) |
| Premises running costs | Rent, utilities, business rates, insurance and other running costs for business premises |
| Repairs and maintenance costs | Repairs and maintenance of premises, vehicles or equipment ( not improvements) |
| Office, stationery and admin costs | Phone, broadband, stationery, software subscriptions and general office costs |
| Advertising and marketing | Advertising, website costs, business listings and promotional expenses |
| Business entertainment | Client entertaining note: this is normally not allowable for tax (GOV.UK: business expenses) |
| Interest on bank and other loans | Interest on business loans, overdrafts or credit used for the business |
| Finance charges | Bank charges, credit card fees and similar finance costs |
| Bad debts written off | Trade invoices written off because a client did not pay, subject to HMRC conditions. This will not normally apply where income is recorded using the cash basis because unpaid income has not been included as turnover. |
| Professional fees | Accountancy, legal and other professional fees relating to the business |
| Depreciation | Accounting depreciation - not allowable tax expense; eligible capital expenditure may qualify for capital allowance, which is dealt with when finalising the business's taxable profit. |
| Other business expenses | Any other allowable costs not covered above |
Residential mortgage interest for individual landlords. Residential property finance costs are generally not deducted when calculating taxable rental profit. Instead, eligible costs are considered when calculating a basic rate tax reduction at year-end. The amount of relief can be limited by the landlord's circumstances. You still record residential finance costs during Q2, but they are dealt with in the year-end tax return, not in the quarterly totals.
Can you use simpler categorisation?
You can choose simpler categorisation for a tax year if the turnover from an individual self-employment business is below £90,000, or the total turnover from your UK property business is below £90,000.
Under simpler categorisation, you may only need to categorise a transaction as income or expense for that source, rather than using the full category list. Residential property finance costs must be identified separately, even when simpler categorisation applies.
This threshold applies separately to each eligible self-employment or UK property income source, not to your combined total income across all sources. If you have multiple businesses or both self-employment and property income, each is assessed individually.
If you're unsure whether simpler categorisation applies to your situation, check the GOV.UK guidance on digital record keeping or speak to a tax adviser.
Can you use Excel or Google Sheets for MTD?
Yes, a spreadsheet is a valid way to keep your MTD records. HMRC's own guidance confirms this. The one step you cannot skip is the digital link between your spreadsheet and HMRC. You cannot manually copy or retype your totals into a submission tool. The figures must flow digitally from your records to your submission. Bridging software like AbraTax creates that link.
Here's how the process works:
- In AbraTax, keep your records in a spreadsheet structured with date, description, type, category, and amount columns. Refer to the example compliant records that AbraTax has.
- When your second quarterly update period is ready, download the free self-employment bridging template or UK property bridging template from AbraTax.
- Link the cumulative totals from your spreadsheet to the template using formulas.
- Save the template as a CSV and upload it to AbraTax.
- Review the figures and submit your update to HMRC.
The bridging template contains step-by-step instructions. Watch the AbraTax submission walkthrough if you want to see the process before you start.
AbraTax is listed on HMRC's recognised software page for Making Tax Digital for Income Tax.
How AbraTax helps you submit spreadsheet records
AbraTax is built for people who already keep records in a spreadsheet and want to submit quarterly updates to HMRC without switching to full accounting software.
Keep records in the spreadsheet you already use. When your second quarterly update is ready, use the AbraTax bridging template to prepare and submit your cumulative totals to HMRC.
What AbraTax does:
- Provides bridging templates for self-employment, UK property, and foreign property, which are pre-mapped to HMRC's income and expense categories.
- Accepts your uploaded CSV, validates the figures, and submits them to HMRC through the Making Tax Digital API.
- Returns a submission confirmation you can save as your record of the update.
- Does not require a bank feed or access to your bank account.
- Supports amendments to earlier updates without additional cost.
- Keeps quarterly submissions and your year-end tax year in the same account.
What do you do:
- Keep and update your own digital records throughout Q2.
- Link your spreadsheet totals to the bridging template using formulas.
- Upload, review, and confirm a submission before the 7 November deadline.
MTD Q2 checklist
Use this before 7 November 2026
During the record-keeping period (6 July to 5 October 2026)
- Record every relevant income transaction date, amount, and category.
- Record every relevant business expense date, amount, and category.
- Keep separate records for each sole trader business.
- Keep UK property records separate from self-employment records.
- Identify residential property finance costs separately from other property expenses.
- Correct any errors from Q1 in your cumulative records.
Before submitting (deadline, 7 November 2026)
- Check your cumulative totals cover 6 April to 5 October 2026, not just July to October.
- Review each category total for accuracy.
- Submit through HMRC-recognised software like AbraTax and save your submission confirmation.
Frequently Asked Questions
1.When does MTD Q2 start and end?
The second quarterly record-keeping period runs from 6 July to 5 October 2026 (or 1 July to 30 September for calendar update periods). The update you send to HMRC must contain cumulative totals covering 6 April to 5 October 2026. The submission deadline is 7 November 2026.
2.Do I only report July to October in my Q2 update?
No. Each quarterly update contains year-to-date cumulative figures from the start of the tax year, not just the most recent quarter. Your Q2 submission covers 6 April to 5 October. Read the full explanation of cumulative reporting.
3.Do I need to upload receipts with my quarterly update?
No. You do not normally upload individual receipts or invoices with a quarterly update.(HMRC: digital record-keeping) You should, however, retain the supporting evidence you would normally need under standard tax record-keeping rules.
4.I haven’t submitted Q1 yet. What should I do?
Because the second update contains cumulative figures, sending it can satisfy the outstanding first and second quarterly update obligations. HMRC will not apply penalty points for late quarterly updates for the 2026 to 2027 tax year, but the updates must still be completed before the year-end tax return can be submitted. The tax return deadline is 31 January 2028, though you can submit before then. (HMRC: MTD penalties) Full step-by-step guide: I missed the 7 August deadline, what now?
5.What happens if I miss the 7 November deadline?
HMRC will not apply penalty points for late quarterly updates for the 2026 to 2027 tax year. (GOV.UK: MTD penalties) From the 2027 to 2028 tax year onwards, missed deadlines earn penalty points. Reaching four points results in a £200 penalty. A further £200 penalty can apply for each subsequent missed deadline while the threshold conditions continue to be met. Building the Q2 habit this year matters.
6.Does a quarterly update calculate or trigger a tax payment?
No. Sending a quarterly update does not itself trigger a tax payment. Your existing Self Assessment payment timetable continues to apply. (GOV.UK: MTD payments)