MTD Q2 Update: Your Spreadsheet Checklist for 5 October

The first Making Tax Digital for Income Tax deadline has been and gone, and the verdict from most sole traders and landlords who went through it was the same: the filing itself took minutes, and getting the numbers ready took days. The MTD Q2 quarterly update is the chance to not repeat that.

Your second quarter closes on 5 October 2026. The update itself is not due until 7 November. That gap is where the damage usually happens — the quarter ends, everyone moves on, and then in the first week of November someone opens a spreadsheet covering four months of transactions and starts sorting.

What the Q2 quarterly update actually covers

If you are in the first MTD wave (self-employment or property income above £50,000), your quarters run to the standard calendar:

• Q1: 6 April – 5 July 2026, filed by 7 August 2026
• Q2: 6 July – 5 October 2026, filed by 7 November 2026
• Q3: 6 October 2026 – 5 January 2027, filed by 7 February 2027
• Q4: 6 January – 5 April 2027, filed by 7 May 2027

Some software lets you elect calendar quarters instead (to 30 June, 30 September and so on), which shifts the period boundaries but not the filing pattern. If you are not sure which basis you are on, check before you start tidying — sorting transactions to the wrong cut-off is a day you do not get back. HMRC sets out the basics in its guidance on using Making Tax Digital for Income Tax.

A quarterly update is not a tax return. It is a summary of your income and expenses by category for the period. No adjustments, no reliefs, no clever year-end decisions. That simplicity is exactly why the prep work feels so annoying — you are doing hours of sorting to produce a short list of totals.

Why the first quarter was harder than it needed to be

The pattern reported again and again after August was not a software failure. It was a data failure. Bank exports downloaded in overlapping date ranges, so transactions appeared twice. Categories that made sense in April did not match the HMRC boxes in August. Personal and business spending sitting in the same account with no marker to tell them apart. Receipts in a folder, unreconciled, waiting for a rainy day that never came.

None of that is caused by quarterly reporting. Quarterly reporting just makes it visible four times a year instead of once.

The five-point spreadsheet checklist before 5 October

If you keep your records in Excel, Google Sheets or Numbers, here is what is worth doing in the next few weeks rather than in November.

1. Fix your date boundary

Export your bank data for exactly 6 July to 5 October, not "the last three months". Overlapping exports are the single most common source of duplicate transactions, and duplicates inflate both your income and your expenses without ever looking obviously wrong.

2. Categorise as the quarter runs, not at the end

Ten minutes a fortnight beats four hours in November, and the reason is memory. You know what that £180 payment in mid-August was for now. You will not in three months. Categorising late is not just slower, it is less accurate.

3. Check your categories map to real HMRC boxes

"Misc", "Stuff" and "Business expenses" are not categories HMRC recognises. Your quarterly update has to allocate spending to defined heads — cost of goods, staff costs, premises, motor expenses, and so on. If your spreadsheet uses your own shorthand, decide now what each one maps to and write it down somewhere the mapping survives. We covered what counts as an acceptable record in more detail in what actually counts as a digital record.

4. Confirm you are reporting the right figures

Gross or net is still catching people out, particularly landlords whose letting agent statements show rent after commission and repairs have been deducted. The figure HMRC wants is usually not the figure that landed in your bank account. If that applies to you, read gross or net income for quarterly updates before you total anything.

5. Make sure the digital link holds

If your data moves from spreadsheet to bridging tool, that transfer has to be a digital link. Retyping a total into a submission form breaks the chain, even when the number is correct. Our guide to digital link requirements for spreadsheets explains where people usually break it without realising.

The soft landing is real, but narrower than people think

There is genuine relief in year one. For taxpayers mandated from April 2026, late submission of the first four quarterly updates does not attract penalty points, provided the other conditions are met. The ICAEW summary of the penalty regime and the LITRG guidance on MTD penalties both set out how the points system works.

Two things that relief does not do. It does not extend to your final declaration for 2026/27, which is due by 31 January 2028 and carries the usual penalties. And it does not remove the requirement — the updates still have to be made, and the year-end return depends on them being there. A missed quarterly update is a problem you have deferred, not one you have avoided.

Worth noting too that from 6 April 2027 the full points regime applies to everyone, which is the same year the threshold drops to £30,000 and the population roughly doubles. Whatever habit you build this year is the one you will be running when the relief ends.

A routine that actually survives contact with a busy quarter

The version of this that works is boring and short:

1. Every fortnight: export the new transactions, categorise them, flag anything you are not sure about. Fifteen minutes.
2. Week the quarter closes: pull the full period export, check the totals against your bank balance movement, clear the flagged items.
3. Filing week: run the summary, submit through your bridging tool, keep a copy of what you sent.

The point is that step three is meant to be dull. If filing week is stressful, the problem is almost always in steps one and two.

If the sorting is the part you hate

Getting from a messy export to clean quarterly totals is a data problem, not an accounting problem, and it is the part that eats the weekend. TaxPrepUK takes a spreadsheet or bank export, classifies the transactions, flags duplicates and gaps, and gives you a summary you can hand to whichever bridging tool you already use. It runs entirely in your browser, so your figures never leave your device. It is a data preparation tool, not a bridging tool and not HMRC-approved software — you still submit through the tool you have chosen.

Either way, the useful move this month is the same one: do the tidying while the quarter is still fresh. Q2 closes on 5 October. November is for filing, not for archaeology.