MTD Round One is Done: Your Checklist and Next Steps as a Creative

If you’re a musician, filmmaker, designer, actor or artist affected by Making Tax Digital for Income Tax, you’ve just reached an important milestone.

The first quarterly update for the 2026–27 tax year was due on 7 August 2026. That may have involved new software, digital records, unfamiliar categories and a fair amount of head-scratching between rehearsals, shoots and client work.

So, how did it go?

Whether you filed on time, submitted it late during HMRC’s first-year soft landing, or still haven’t quite got everything in place, there’s no need to panic. You can use this point to tidy up your system and make the next update much smoother.

Here’s your practical MTD checklist : plus the things creatives often miss.

Understanding who needs to use MTD now

The first phase of Making Tax Digital for Income Tax applies from 6 April 2026 if your qualifying income was over £50,000 on your 2024–25 tax return.

For a creative, qualifying income may include income from several sources, such as:

• Freelance design work

• Acting or presenting fees

• Music, performance or session work

• Film, television or production services

• Art sales and commissions

• Income from property, where relevant

The threshold is based on qualifying income, not simply the profit left after expenses. If you’re unsure whether you fall within the rules, use HMRC’s MTD eligibility checker.

The next phases are:

• Over £30,000 qualifying income : MTD starts from April 2027

• Over £20,000 qualifying income : MTD starts from April 2028

If you’re under the current threshold, you may not need to join yet. But moving towards digital record-keeping now can still save you a stressful scramble later.

Checking off what MTD has changed

MTD doesn’t mean you’re filing four full tax returns every year. You’ll still submit one annual tax return and pay any tax due by 31 January.

The difference is that you now need to:

• Keep digital records of your business income and expenses

• Use MTD-compatible software

• Send a summary of your income and expenses every three months

• Use software to submit your annual tax return

The quarterly updates are summaries. They aren’t the same as your final tax return, and they don’t include every tax adjustment or relief claim.

Think of them as regular check-ins with HMRC : not four separate January-style filing jobs.

After each update, your software can usually show a predicted tax bill. It won’t always be the final figure, but it gives you a much clearer idea of where you stand.

Completing your first-round checklist

Set aside some time to work through the following list. You don’t need a perfect system overnight : you need a reliable one that you can keep using.

Your MTD checklist

• Confirm that your qualifying income put you into the first MTD phase

• Sign up for MTD for Income Tax with HMRC

• Choose compatible accounting or bookkeeping software

• Connect your software to HMRC

• Enter all business income received during the first quarterly period

• Record allowable business expenses

• Upload or attach digital copies of receipts

• Check that personal spending has not been included

• Submit your first quarterly update

• Save confirmation that the update was sent

• Review your predicted tax bill

• Put money aside towards your tax liability

• Add the next quarterly deadline to your diary

If you’ve already sent the first update, don’t simply forget about it until November. Review what worked, what took too long and which receipts or payments were difficult to find.

That review is valuable. Your bookkeeping system should support your creative work : not become another production with an impossible schedule.

Marking the next quarterly deadlines

For the standard 2026–27 periods, the quarterly update deadlines are:

Update	Deadline
First quarterly update	7 August 2026
Second quarterly update	7 November 2026
Third quarterly update	7 February 2027
Fourth quarterly update	7 May 2027

Your annual tax return and any tax payment for 2026–27 will be due by 31 January 2028.

The easiest way to avoid a last-minute rush is to work backwards from each deadline. Give yourself a private deadline a week or two earlier, then schedule a short bookkeeping session every week or fortnight.

That might look like:

• Every Friday: photograph receipts and check incoming payments

• At the end of each project: record final income and project expenses

• Once a month: reconcile your business bank account

• Two weeks before each deadline: review the quarter and prepare the update

• Before submitting: check unusual transactions with your accountant

You’re more likely to keep up with a 20-minute routine than a heroic six-hour bookkeeping session every three months.

Avoiding the creative expenses people often miss

Project-based work can make expenses difficult to track. You might buy materials for a commission in March, use them in April and receive payment in May. A production may cover your travel but not your meals. A client might reimburse one expense while leaving another for you to absorb.

Keep clear records for costs such as:

• Materials, props and consumables

• Studio, rehearsal and workspace hire

• Equipment hire and repairs

• Travel to auditions, shoots, gigs and client meetings

• Professional subscriptions and memberships

• Agent, manager or production fees

• Insurance for instruments, cameras or other equipment

• Marketing, website and promotional costs

• Training that directly relates to your existing work

The key is evidence. A bank transaction alone may not explain what you bought, who it was for or why it related to your business.

Add a note to your receipt while you still remember. “Train ticket” is less useful six months later than “travel to location shoot for Client X”.

And separate business costs from personal spending. A new pair of shoes might be essential costume for a production : or simply a personal purchase. The context and supporting evidence matter.

Making digital records work for you

Digital records don’t have to mean sitting at a desk with a complicated system. In fact, you can often make things easier by capturing information at the moment it happens.

Try these habits:

• Use a phone app to snap receipts immediately

• Forward digital invoices to your bookkeeping software

• Create categories that reflect your creative work

• Photograph paper receipts before they fade

• Keep a separate folder for each major project

• Record mileage or travel details as you go

• Check that each receipt is readable and dated

If you prefer spreadsheets, you can still use them : but they need to be connected to HMRC through bridging software. Bridging software transfers the relevant totals from your spreadsheet to HMRC.

Alternatively, you can use all-in-one MTD-compatible software, such as a suitable package that works with Dext, to capture receipts and organise your records more efficiently.

The right choice depends on how you work, how many income streams you have and whether you want to manage submissions yourself or ask an accountant to help.

Staying calm about the new penalty system

The penalty system for MTD is points-based rather than an automatic fine for every missed update.

For the 2026–27 tax year, HMRC has confirmed that there will be no penalty points for late quarterly updates. You still need to send all four updates before you can submit your annual tax return, though.

That doesn’t mean every deadline can be ignored. Late annual returns and late tax payments can still lead to penalties and interest.

From later tax years, missing a quarterly update can result in a penalty point. Once you reach four points, HMRC can issue a £200 penalty, with further penalties for additional missed deadlines.

The best protection is a routine that works when your income doesn’t.

You might be working on a film set for three weeks, touring for a month or moving between commissions. Set calendar reminders, use software notifications and decide in advance who is responsible for reviewing and submitting your updates.

Building a tax habit around irregular income

MTD may make your income more visible, but it won’t make creative income predictable. You can still have a large invoice one month and very little coming in the next.

That’s why you should treat your predicted tax bill as a prompt : not money that’s available to spend.

After each quarterly update:

1. Review the predicted tax figure.

2. Check whether it reflects all your income and expenses so far.

3. Move a sensible amount into a separate tax savings account.

4. Leave room for changes, especially if you’re between projects.

5. Ask for advice if the figure looks unexpectedly high or low.

You can read more about how payments on account work in our guide to payments on account for UK creatives.

Don’t wait until January to discover that a successful quarter has created a tax bill you haven’t prepared for.

Getting help before the next update

You don’t need to become an accountant to comply with MTD. You need a clear process, accurate records and software that fits your work.

At Creative and Numbers, we work exclusively with creative professionals across the UK. We understand that your bookkeeping may involve tour income, overseas clients, agent commissions, equipment hire, production costs and several projects running at once.

We can help you:

• Choose and set up compatible software

• Organise your digital records

• Understand what your quarterly figures mean

• Review your predicted tax bill

• Prepare and submit quarterly updates

• Complete your annual tax return

• Build a bookkeeping routine you can actually maintain

The first MTD round is done. Now you have a chance to make the next one easier : with fewer missing receipts, fewer January surprises and more confidence in your numbers.

Need help with MTD for Income Tax? Get in touch with Creative and Numbers. We’ll help you find a system that keeps the admin in the background, where it belongs, while you focus on the work only you can create.