If you've heard that Making Tax Digital means four updates a year, you might be picturing four separate little tax returns. Happily, it's gentler than that. From 2025-26 onwards, the quarterly updates are cumulative — each one is a running year-to-date total, not a standalone chunk.
That one word changes everything about how the year feels. Let's walk through it with a real set of numbers.
Meet Sarah, a landlord with one flat
Sarah rents out a flat in Leeds. Her gross rent is £1,400 a month, so £16,800 a year. On its own that's below the threshold — but Sarah also does some freelance design work, and because the MTD threshold looks at your combined gross self-employment and property income (turnover, before expenses), her two incomes together push her over £50,000. So she's in MTD for Income Tax from 6 April 2026.
If you're juggling more than one income source, our guide on MTD when you have other income walks through how the threshold is measured.
For this worked example, let's focus purely on her property figures, which she reports separately from her self-employment.
The four quarters, built up step by step
The standard quarterly periods run to 5 July, 5 October, 5 January and 5 April. Here's what Sarah records in each three-month window.
Quarter 1 (6 April – 5 July)
- Rent received: £4,200
- Expenses (letting agent fees, a plumber, insurance): £900
Quarter 2 (6 July – 5 October)
- Rent received: £4,200
- Expenses: £500
Quarter 3 (6 October – 5 January)
- Rent received: £4,200
- Expenses (a boiler repair): £1,300
Quarter 4 (6 January – 5 April)
- Rent received: £4,200
- Expenses: £400
Now here's the cumulative part. Each update you send isn't "this quarter's figures" — it's everything since 6 April.
| Update (deadline) | Cumulative income | Cumulative expenses |
|---|---|---|
| Q1 — by 7 August | £4,200 | £900 |
| Q2 — by 7 November | £8,400 | £1,400 |
| Q3 — by 7 February | £12,600 | £2,700 |
| Q4 — by 7 May | £16,800 | £3,100 |
Notice how the numbers only ever grow. By her fourth update, Sarah is reporting the whole year: £16,800 of rent and £3,100 of expenses. (You can check those running deadlines against our MTD deadlines guide.)
Why cumulative is actually good news
The big advantage: mistakes fix themselves.
Say Sarah forgot to log that £900 of Q1 expenses until October. Under a cumulative system she doesn't need to reopen Q1 or send a correction. She simply includes the £900 in her Q2 cumulative total, and the year-to-date figure is now right. The running total quietly absorbs it.
The same goes for a payment that landed in the wrong quarter, or a receipt that surfaced late. As long as the figure is in the total by the time you reach the relevant update, you're covered. Good software does this maths for you — you just keep recording income and expenses as they happen, and the cumulative figure updates itself.
This is why "little and often" beats a once-a-year panic. If you reconcile each month, your quarterly update is essentially already done.
What the quarterly updates are not
A quarterly update is not a tax bill, and it's not the final word. It's a rough, in-year snapshot. You don't claim every relief or allowance at this stage, and HMRC isn't asking you to pay anything off the back of it.
The tidying-up happens once, at the end, in your final declaration — due by 31 January after the tax year ends, the same date Self Assessment always used. That's where you confirm the figures, add anything else (other income, allowances, reliefs), and arrive at the actual tax owed. The four updates plus that final declaration together replace the old Self Assessment return for this income.
A quick word on jointly-owned property
If Sarah owned that flat 50/50 with her partner, the picture splits cleanly. Each owner reports their share of the income and expenses, and the threshold is measured per person. So Sarah would record £8,400 of rent and £1,550 of expenses across her year — her half — and her partner would do the same on their own digital records. Two sets of cumulative updates, each running to their own year-to-date total.
Keeping it simple
You don't need to memorise any of this. The point of the cumulative system is that you record as you go, and the year-to-date figure takes care of itself.
That's exactly what Quarterwise is built to do for landlords with one property or a small portfolio: log your rent and expenses, and it keeps the running totals and files each quarterly update and your final declaration to HMRC — no spreadsheets, no last-minute scramble. If you'd like a refresher on the basics first, start with what Making Tax Digital actually is.
This is general information, not tax advice. Always check your own circumstances with HMRC or a qualified accountant.
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