How Do Quarterly Updates Work Under Making Tax Digital?
- 1 day ago
- 3 min read
Updated: 6 hours ago
With Making Tax Digital (MTD) for Income Tax now rolling out from April 2026, one of the biggest changes for sole traders and landlords is the requirement to submit quarterly updates.
If you’re wondering What exactly do I need to do every 3 months? you’re not alone.
At DUO Accountants, we’re here to make this simple, stress-free, and easy to understand.
What Are Quarterly Updates?
Quarterly updates are regular reports you send to HMRC every 3 months showing your business income and expenses.
Instead of submitting everything once a year, you’ll now keep digital records, send updates four times a year, and submit everything using MTD-compatible software.
These updates are essentially a summary of your financial activity for that period. Not a full tax return.
What Information Do You Send?
Each quarterly update includes:
Your income (sales, fees, rental income)
Your expenses (business costs like supplies, travel, etc.)
This data comes directly from your digital records and software.
Important to Know: You are not sending individual receipts, just totals for each category.
How Do You Submit Quarterly Updates?
You must use MTD-compatible software (like Xero, QuickBooks, FreeAgent, etc.).
Here’s how it works:
Record your income and expenses regularly
Your software creates a summary
Submit the update directly to HMRC
There’s no manual form filling — it’s all digital.
At DUO, we always recommend keeping your records updated weekly to avoid last-minute stress.
When Are Quarterly Updates Due?
You’ll submit 4 updates per tax year, typically based on these periods:
Quarter | Period | Deadline |
Q1 | 6 April – 5 July | 7 August |
Q2 | 6 July – 5 October | 7 November |
Q3 | 6 October – 5 January | 7 February |
Q4 | 6 January – 5 April | 7 May |
You usually have 1 month after each quarter ends to submit.
Are Quarterly Updates the Same as a Tax Return?
No. This is where many people get confused. Quarterly updates are:
✅ Simple summaries
❌ Not final
❌ No tax is paid at this stage
They are not “mini tax returns.” At the end of the year, you will still need to make adjustments (e.g. allowances, reliefs) and submit a final declaration (tax return). This final step confirms everything and calculates your actual tax bill.
Will HMRC Calculate My Tax During the Year?
Yes, but only as an estimate. Based on your quarterly updates, HMRC can give you a running estimate of your tax position. This helps you plan ahead, avoid surprises, and manage cash flow better
Can You Make Mistakes in Quarterly Updates?
Yes, and that’s okay. Quarterly updates can be corrected later. It don’t need to be perfect as it will be finalised at year-end. You can amend errors in future submissions or during your final declaration.
Think of quarterly updates as a “work in progress,” not the final version.
Who Needs to Submit Quarterly Updates?
From April 2026, MTD applies if:
You are self-employed or a landlord
Your income is over £50,000
It will expand to:
£30,000+ from April 2027
What Happens After the 4 Quarterly Updates?
At the end of the tax year, you’ll:
Review your figures
Make any adjustments
Submit your final declaration
Your quarterly updates will already be included — saving time and reducing admin.
Why Is HMRC Introducing Quarterly Updates?
The goal is to:
Reduce errors in tax reporting
Encourage better record-keeping
Give taxpayers real-time visibility of their finances
In short — fewer surprises, more control.
Common Questions (FAQs)
Do I need to pay tax every quarter?
No — payments are still due as normal (usually January and July).
Do I need an accountant?
Not required — but highly recommended. MTD software helps, but an accountant ensures accuracy, tax efficiency, and peace of mind
What if I miss a deadline?
Late submissions may lead to penalties under the new points-based system.
Can my accountant submit for me?
Yes — you can authorise an agent (like DUO 😉) to handle everything.
Final Thoughts from DUO Accountants
Quarterly updates might feel like a big change but they’re actually designed to make your life easier. Once you get into the rhythm, it becomes simple, a routine and less stressful than yearly panic. At DUO, we help you stay compliant, organised, and confident — without the jargon.
Need Help With MTD?
If you’re unsure where to start, we’re here to help. From setting up your software to managing your quarterly updates, we’ll guide you every step of the way. Book your free discovery call now! You may also visit this MTD website for more articles focused on MTD.
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