Making Tax Digital Quarterly Updates: Deadlines and Requirements

Making Tax Digital quarterly updates are now part of the record-keeping routine for many sole traders and landlords. If you are within Making Tax Digital for Income Tax, you must keep digital records and use compatible software to send summary information to HMRC during the tax year.

The word “quarterly” can make the process sound like four extra tax returns. In practice, quarterly updates are simpler than a full Self Assessment return. However, they still need reliable records, suitable software and a routine that prevents transactions from building up.

This guide explains how the updates work, the standard deadlines, what information is included and how to prepare.

What are Making Tax Digital quarterly updates?

A quarterly update is a summary of the income and expenses recorded in your compatible software for a three-month period. The software sends the figures digitally to HMRC.

The update gives HMRC a view of your business activity during the year. It is not a final tax calculation, and it does not replace your annual tax return. Your final position is dealt with after the tax year when you review the records, make any necessary adjustments and submit the required year-end information.

You should not wait until the deadline to begin organising your records. A monthly bookkeeping routine makes each quarterly update much easier and gives you more useful financial information throughout the year.

Who needs to send quarterly updates?

Quarterly updates apply to people who are required to use Making Tax Digital for Income Tax. The phased introduction began on 6 April 2026 for qualifying individuals with gross self-employment and property income above the relevant threshold.

Your qualifying income is generally based on gross income before expenses from self-employment and property. Employment income taxed through PAYE does not normally count towards the threshold.

If you have more than one qualifying business, the reporting requirements can be more detailed. For example, a sole trader with a separate property business will normally need to keep records and send updates for each income source. Compatible software should help keep these records correctly separated.

Making Tax Digital quarterly update deadlines

Under the standard tax-year reporting periods, the quarterly update deadlines are:

These dates repeat each tax year. They are easy to remember once a routine is established, but the February and May deadlines can arrive at busy times for small businesses. Setting internal bookkeeping deadlines before HMRC’s submission dates provides time to resolve missing information.

Can you use calendar quarters?

Some taxpayers may be able to make a calendar-quarter election. This aligns the record periods more closely with ordinary calendar quarters while keeping the same submission deadlines.

Calendar quarters may fit more naturally with management accounts or existing reporting routines. Before choosing this approach, check how it works with your accounting period and software.

What information is included in an update?

Your compatible software uses the digital records entered for the quarter. The update will normally summarise business income and allowable expense categories. Depending on the software and the nature of the business, the figures may be grouped rather than submitted as a list of individual transactions.

Your underlying records still matter. Keep evidence such as sales invoices, purchase invoices, receipts and bank information for the required retention period. The quarterly update is a summary; it is not a substitute for accurate bookkeeping or supporting documents.

Common records include:

• Sales and other business income
• Purchases and subcontractor costs
• Travel and motor expenses
• Premises, telephone and software costs
• Professional fees and insurance
• Property income and allowable property expenses

Transactions should be assigned to the correct business and category. Personal spending must not be treated as a business expense merely because it appears in a business bank account.

Are quarterly updates the same as tax returns?

No. A quarterly update does not finalise your tax liability. It is based on the information recorded up to that point and may not include year-end adjustments, reliefs or every item affecting your final tax calculation.

This distinction is important. An update may help you understand how the business is performing, but it should not automatically be treated as a final tax bill. Your annual tax return remains the point at which the overall tax position is confirmed.

Do the figures have to be perfect?

Your records should be complete and accurate as far as reasonably possible when the update is sent. If you later find a mistake, do not ignore it. Correct the digital records using the appropriate process in your software so that the accurate information feeds into the year-end position.

Regular bank reconciliation is one of the best safeguards. It compares the transactions in the bookkeeping system with the bank statement and helps identify duplicated, omitted or incorrectly entered items.

What if there was little or no activity?

A quiet quarter does not necessarily remove the reporting requirement. If you remain within Making Tax Digital, your software may still need to send an update showing the activity recorded for that period, even if the figures are low or nil.

Do not assume that an empty quarter can simply be skipped. Check the position before the deadline, particularly if a business has temporarily stopped trading or a property has been empty.

Compatible software and digital links

Making Tax Digital updates must be sent through software that works with HMRC’s system. This may be a bookkeeping platform, a suitable spreadsheet used with bridging software, or a combination of connected products.

Where information moves between different parts of the accounting system, digital links are important. Repeatedly copying and pasting figures between files can weaken the audit trail and may not meet the digital-link requirements.

Before committing to software, consider whether it can:

• Maintain records for each self-employment or property business
• Connect securely to the relevant bank accounts
• Categorise income and expenses appropriately
• Submit Making Tax Digital quarterly updates
• Support corrections and year-end reporting
• Give your accountant or bookkeeper suitable access

A practical routine for each quarter

The easiest way to manage quarterly reporting is to avoid treating it as a quarterly job. A simple monthly routine spreads the work and improves accuracy.

1. Record or import all sales and expenses.
2. Upload and match receipts and invoices.
3. Reconcile every relevant bank and credit-card account.
4. Review uncategorised and duplicated transactions.
5. Separate private spending from business costs.
6. Check that each income source is recorded in the correct business.
7. Review the quarter before submitting the update.

Complete these checks soon after each month ends. For the quarterly deadline, you should then be reviewing organised records rather than rebuilding three months of bookkeeping.

Common quarterly-update mistakes

Several avoidable problems can make the process more stressful:

• Leaving all bookkeeping until the submission week
• Connecting the wrong bank account to the software
• Mixing property and self-employment records
• Recording transfers between accounts as income
• Claiming personal costs as business expenses
• Forgetting cash sales or cash purchases
• Assuming the quarterly estimate is a final tax calculation
• Missing a deadline because there was no activity

A review process is particularly valuable when bank feeds use automatic rules. Automation saves time, but a rule can repeatedly miscategorise transactions if it was set up incorrectly.

What happens after the fourth update?

The fourth quarterly update does not complete the year. You still need to review the annual records and deal with year-end adjustments, other income, reliefs and the final tax position through the required HMRC process.

This is when items such as capital allowances, accounting adjustments and information outside the day-to-day bookkeeping records may need attention. The final tax return and payment deadlines remain important, even when all four updates were submitted on time.

How to prepare before your first deadline

Start by confirming whether Making Tax Digital applies to you and when your mandated start date falls. Then choose compatible software, separate your business records and bring the bookkeeping up to date.

It is also sensible to:

• Create a list of every business and property income source
• Confirm the reporting periods your software will use
• Add the four deadlines to your calendar
• Set internal review dates at least one week earlier
• Arrange access for your accountant or bookkeeper
• Test the bank feeds and receipt-capture process
• Agree who will review and submit each update

If your records are currently behind, deal with the backlog before the first reporting deadline. Catching up under pressure increases the chance of missing income, duplicating costs or using the wrong categories.

Support with Making Tax Digital quarterly updates

Good bookkeeping turns Making Tax Digital from a recurring deadline into a manageable routine. It also gives you clearer information about cash flow, expenses and business performance.

Real Key Accountancy can help sole traders and landlords organise digital records, establish a regular bookkeeping process and prepare for Making Tax Digital reporting.

If you would like to discuss your records, software or upcoming quarterly deadlines, contact Real Key Accountancy.

Frequently asked questions

How many quarterly updates are required each year?

There are normally four updates for each relevant business or income source during the tax year.

Do quarterly updates replace Self Assessment?

No. Quarterly updates provide in-year summaries. You must still complete the required year-end reporting and finalise your annual tax position.

Can my accountant submit the updates?

Yes, an authorised agent can help manage the process using compatible software, although you remain responsible for ensuring your obligations are met.

Can I submit a quarterly update directly on the HMRC website?

The updates are sent through compatible software rather than by typing the figures into a standard online Self Assessment form.

Should I save receipts if the figures are in my software?

Yes. Digital bookkeeping does not remove the requirement to retain appropriate evidence and accounting records.

This article provides general information and does not constitute tax or accounting advice. Rules can change and individual circumstances differ, so obtain advice based on your position.