MTD Quarterly Submissions: Complete Landlord Guide

Quarterly submissions are the foundation of Making Tax Digital for Income Tax Self Assessment. Instead of filing one annual tax return, you will submit four quarterly updates throughout the year, giving HMRC real-time visibility of your rental income and expenses.

The first quarterly deadline for landlords above the £50,000 threshold is 5 July 2026, just three months after MTD becomes mandatory. Missing this deadline triggers penalty points that can quickly escalate into financial penalties.

This guide explains exactly what HMRC requires in each quarterly submission, how to prepare your data, common errors to avoid, and how MTD-compatible software like Latch automates the entire process.

What Are Quarterly Updates?

Quarterly updates are digital summaries of your rental income and allowable expenses for a specific three-month period. You submit these updates to HMRC via MTD-compatible software throughout the tax year.

Quarterly updates are not tax returns. They do not calculate your final tax liability. Instead, they provide HMRC with ongoing information about your business income and expenses, allowing them to:

• Monitor your income in real-time throughout the year
• Identify potential discrepancies or anomalies early
• Provide you with estimates of your tax liability as the year progresses
• Reduce the risk of large unexpected tax bills at year-end

Your actual tax liability is finalised after the end of the tax year when you make your final declaration by 31 January.

Quarterly Deadlines for Landlords

The tax year runs from 6 April to 5 April. You must submit four quarterly updates, one for each quarter, with deadlines one month after the end of each period.

Important: These are the standard quarterly periods. When you first join MTD, your initial quarters may differ slightly depending on your start date. Your software will calculate the correct periods.

Grace Period

You have one month after the end of each quarter to submit your update. This grace period gives you time to ensure all transactions for the quarter have cleared your bank and been recorded in your software.

What Data HMRC Requires Each Quarter

Each quarterly update must include a summary of your rental business income and expenses for the period. HMRC does not require transaction-level detail in the submission itself, but you must maintain detailed digital records that support your summary figures.

Income Summary

You must report total income received during the quarter, categorised as:

• Rental income: Rent payments received from tenants
• Other property income: Service charges, ground rents, rental deposit interest, or other property-related income

Report income on a cash basis (when you receive it) rather than accruals basis (when you invoice it). If a tenant pays rent in advance covering multiple quarters, you report that income in the quarter you receive the payment.

Expense Summary

Report total allowable expenses paid during the quarter. HMRC requires expenses to be categorised into specific types:

How to Categorise Income and Expenses

Correct categorisation is critical for MTD compliance. Miscategorised transactions can result in:

• Understated or overstated income (triggering HMRC queries)
• Disallowed expenses (paying more tax than necessary)
• Audit risk if patterns suggest systematic miscategorisation

Income Categorisation

Most landlords have straightforward income categorisation:

Expense Categorisation

Expense categorisation requires more care. Common categorisation questions:

Repairs vs Improvements: Repairs (like fixing a broken boiler) are allowable expenses. Improvements (like installing a new kitchen when the old one was functional) are capital expenses and not immediately deductible.

Mortgage Interest: Since 2020, mortgage interest is no longer deducted from rental income. Instead, you receive a 20% tax credit. Your MTD software should handle this automatically, but ensure mortgage payments are correctly categorised as finance costs.

Mixed-Use Expenses: If you use your home office for property management, you can claim a portion of utilities, internet, and similar costs. Calculate the business-use percentage and only claim that portion.

Common Errors to Avoid

Based on MTD for VAT and Self Assessment data, these are the most common errors in quarterly submissions:

1. Submitting incomplete data: Waiting for all bank transactions to clear before submitting. If a payment is still pending at the deadline, submit what you have and adjust in the next quarter if needed.
2. Including capital expenditure: Deducting the cost of purchasing property or major improvements as expenses. These are capital, not revenue expenses.
3. Forgetting finance costs: Not reporting mortgage interest payments in the finance costs category.
4. Duplicating transactions: Recording the same expense twice (for example, once when you pay with a credit card and again when you pay the credit card bill).
5. Missing accruals adjustments: MTD uses cash basis, but if you account on accruals basis, you need to make adjustments.
6. Incorrect dates: Recording transactions in the wrong quarter because you use invoice date rather than payment date.
7. Personal expenses: Including personal costs that are not related to the rental business.
8. Missing digital links: Manually re-typing figures from spreadsheets instead of using bank feeds or digital imports.

MTD-compatible software reduces these errors by automatically importing bank transactions, suggesting correct categories, and preventing duplicate entries.

How Latch Automates Quarterly Data Preparation

Latch handles quarterly submission preparation automatically, so you spend minutes instead of hours on MTD compliance.

Automatic Transaction Import

Connect your bank account to Latch and transactions are imported automatically every day. This creates the digital link HMRC requires and ensures your records are always up to date.

AI-Powered Categorisation

Latch uses AI to categorise transactions based on payee names, descriptions, and amounts. The system learns from your corrections, so categorisation becomes more accurate over time.

Common landlord transactions (rent payments, letting agent fees, insurance, utilities) are categorised correctly from day one.

Property-Level Tracking

Allocate each transaction to a specific property. Latch generates property-level reports showing income and expenses for each rental, making it easy to identify profitable and loss-making properties.

Quarterly Summary Generation

When a quarterly deadline approaches, Latch automatically generates your update summary:

• Calculates total income and expenses for the quarter
• Groups transactions into HMRC's required categories
• Identifies any uncategorised transactions requiring review
• Provides a summary preview before submission

One-Click Submission to HMRC

Review your quarterly summary and submit it directly to HMRC via Latch. The software handles all the technical requirements of the MTD API and provides confirmation of successful submission.

End of Year Final Declaration

After the end of the tax year (5 April), you have until 31 January the following year to review your four quarterly submissions and make a final declaration to HMRC.

The final declaration process involves:

1. Reviewing quarterly submissions: Check all four quarters for accuracy and completeness
2. Making adjustments: Correct any errors or add missing information
3. Adding allowances: Claim property allowances, capital allowances, or other reliefs
4. Calculating tax liability: Your software calculates total tax owed based on your income, expenses, and personal tax allowances
5. Submitting final declaration: Confirm the figures and submit to HMRC
6. Paying tax due: Pay any outstanding tax by 31 January

The final declaration replaces the traditional Self Assessment tax return for your property income. If you have other sources of income (employment, self-employment, savings), you may need to include those in your final declaration as well.

Quarterly Submission Checklist

Use this checklist before each quarterly submission to ensure accuracy and compliance:

• All bank transactions for the quarter have cleared and been imported
• Every transaction is categorised correctly (no uncategorised items)
• Transactions are allocated to the correct properties
• Digital receipts are attached to all significant expenses
• No duplicate transactions (check credit card payments vs bank debits)
• Capital expenditure has been excluded from expense totals
• Mortgage interest is correctly recorded as finance costs
• Income includes all rent received, including payments in advance
• Quarterly summary figures are reasonable compared to previous quarters
• Final review completed and submission approved

What Happens If You Miss a Deadline?

Missing a quarterly deadline results in penalty points under HMRC's points-based system. The consequences escalate quickly:

Points expire 12 months after the deadline for the submission that earned them, provided you eventually submit that update.

Latch sends automatic reminders before quarterly deadlines and alerts you if a submission is overdue, helping you avoid penalty points.

Frequently Asked Questions

What if I have no income or expenses in a quarter?

You must still submit a quarterly update showing zero income and zero expenses. Failing to submit any update results in penalty points even if you had no activity.

Can I submit early?

Yes. You can submit any time after the quarter ends. Submitting early gives you more time to correct errors before the deadline.

What if I discover an error after submitting?

You can correct errors in subsequent quarterly updates or when you make your final declaration. The important thing is to submit on time, even if you later need to adjust the figures.

Do I need to attach receipts to submissions?

No. Quarterly updates are summary figures only. However, you must keep digital receipts in your software to support your figures if HMRC queries them.