Making Tax Digital quarterly update preparation for UK landlords and sole traders

What this service is

AiStaffo builds an AI worker that handles the capture and sorting stage of quarterly reporting. It pulls the transactions from your bank and card feeds, collects receipts sent by email or uploaded to a folder, and places each item in the income or expense category your business uses. Anything it cannot place with confidence goes to a review list. At the end of the quarter it totals each source of income and expense and produces a draft. The draft is then checked and submitted by a person through software that HMRC recognises for Making Tax Digital.

Who it is for

The service fits sole traders and landlords who are within the Making Tax Digital for Income Tax rules. The first phase applies to people whose qualifying income was above £50,000 in the 2024/25 tax year. The same capture and categorise pattern also applies to any business that logs transactions in a ledger, including companies in the UK and businesses in India that track GST-related entries. The rules for categories differ between those places, so the category list is set during the audit for each client.

Key dates for the second update

The timetable is fixed by HMRC, not by any software. The table below lists the dates that matter for a sole trader or landlord in the first phase.

The second update is due three days from the date of this page. A new build cannot be assumed to be running before that date. For the 7 November 2026 update, the practical step is to finish the draft from the records you already hold and check it with your adviser or in your current software. The automation is planned for the later quarters, starting with the third update due on 7 February 2027.

What is included

• A review of your current income sources, bank and card accounts, receipt routes and existing software
• A written category list that matches the income and expense headings you use for each source
• A process map that shows where each transaction and receipt enters, who checks what, and where it is filed
• A worker that pulls bank and card transactions from the feeds you approve, and records each one with its date, amount and source
• Receipt capture from email attachments and uploads, with the document linked to the matching transaction
• Flags for missing receipts, duplicate entries and unclear categories, sent to a review list for you to confirm
• A quarterly draft with totals for each income and expense heading, ready for a person to check
• A short written note for each quarter that lists what was confirmed, what was changed and what is still open

How the engagement runs

The work runs in five stages. Each stage ends with a decision by you before the next one starts.

1. Audit. We look at your income sources, accounts, receipt habits and current software. You receive a list of what can be automated and what should stay manual. This is the stage where the free automation audit is used.
2. Process map. We write each step from transaction to draft, with the person who checks each one named. You approve the map before any build starts.
3. Build. We connect the approved feeds and receipt routes, set the category rules and test the review list against a past quarter.
4. Run. The worker runs each week or month on the schedule you approve. It holds items for review rather than deciding them.
5. Support. We check the outputs at the end of each quarter, update the category rules when your business changes, and help you move the draft into your HMRC-recognised software.

Typical timeline

The number of weeks depends on how many accounts, properties and income sources you have, and on the software you already use. AiStaffo sets the length after the audit, when the scope is known. This page does not publish a fixed number of weeks. The audit and the process map are the stages that decide the rest of the plan, so they should not be rushed.

What you provide

You provide access to the bank and card feeds you want included, and you name the person who approves categories. You also provide a sample of past receipts and a copy of your previous year's income and expense headings. If you rent property, you list each property and each income source. The worker can only sort what it can see, so missing feeds or receipts remain missing until you add them.

What the service does not cover

The worker does not decide the tax treatment of any item. It does not decide whether a cost is allowable, whether private use applies to a vehicle or phone, or how a mixed expense is split. It does not file the update or the final declaration, and it does not give tax advice. It cannot create records for transactions that were never captured. Where a category needs a judgement, the item stays in the review list until a person decides. The worker also does not replace the records you must keep for your tax return, which Making Tax Digital does not remove.

The rule in general terms

Making Tax Digital for Income Tax requires in-scope sole traders and landlords to keep digital records and send quarterly updates through compatible software. HMRC does not supply its own software for this, so you need a product that appears on HMRC's compatible software list. HMRC has said that no penalty points will be issued for late quarterly updates during the first year of the regime. Penalty rules have other parts, including the final declaration, so check the current guidance on GOV.UK. This explains the rule in general terms; it is not legal or tax advice for your case.

When this is not worth doing

If you have a small number of transactions each quarter and your software already imports them and suggests categories, a monthly check by hand may be enough. Automation adds the most value when there are many feeds, many receipts or several properties. It also needs an owner who will answer the review list on time. Without that, the draft will sit unchecked, and the quarter will still be late.