MTD Quarterly Updates: What They Are and When They're Due

If you're within scope of Making Tax Digital for Income Tax, MTD quarterly updates are the new rhythm your bookkeeping now runs to. Instead of one annual Self Assessment return, you'll send HMRC a running summary of your income and expenses four times a year, followed by a final declaration. This guide explains what a quarterly update actually contains, when each one is due, and how to prepare them without handing over more than the rules require.

What is an MTD quarterly update?

An MTD quarterly update is a summary of the business income and allowable expenses recorded in your digital records for a set three-month period. It isn't a tax calculation and it isn't a payment request - it's a running total that keeps HMRC's picture of your business income roughly current throughout the year, rather than all arriving at once the following January.

Each update must come from digital records kept using compatible software - the whole point of Making Tax Digital is that the figures are pulled from your bookkeeping, not retyped from a spreadsheet or a shoebox of receipts.

The four quarterly update deadlines

MTD for Income Tax uses standard quarterly periods that apply to most businesses, running from 6 April to 5 April the following year. Each update is due on the 7th of the month following the end of its quarter.

• Quarter 1: 6 April - 5 July, due by 7 August
• Quarter 2: 6 July - 5 October, due by 7 November
• Quarter 3: 6 October - 5 January, due by 7 February
• Quarter 4: 6 January - 5 April, due by 7 May

Some software also supports calendar-month quarters (aligning to the 1st of the month rather than the 6th) as an alternative option, but the standard quarters above are the default most sole traders and landlords will use.

After the four in-year updates, there's a separate year-end step - the final declaration - which is where any adjustments, reliefs, and the actual tax calculation happen. Quarterly updates and the final declaration are not the same submission, and it's worth keeping that distinction clear when you're planning your year.

Why HMRC moved to quarterly reporting

The stated goal behind MTD quarterly updates is to close the gap between when income is earned and when HMRC has visibility of it, reducing the scramble - and the errors - that came with a single annual return covering twelve months of activity. For businesses, the intended trade-off is that smaller, more frequent updates are easier to get right than one large annual reconciliation done from memory months after the event.

Whether that trade-off feels like a benefit depends heavily on how your bookkeeping is organised day to day. If you're logging income and expenses as they happen, a quarterly update is close to a formality - the totals are simply pulled from records that already exist. If you're used to reconstructing the year in January, the same process now has to happen four times, which is where good software earns its keep.

Practical tips for hitting every quarterly deadline

• Record as you go. Enter invoices and expenses close to when they happen rather than batching them up - this is what makes each quarterly update quick rather than a small crisis.
• Reconcile bank data before the quarter closes. A few days' buffer before each deadline to match bank transactions against invoices and receipts catches errors while they're still easy to fix.
• Review the prepared figures, don't just submit them. Treat every quarterly update as a checkpoint - a quick sense-check that income and expense totals look right for the period, not just a box to tick.
• Keep evidence for every allowable expense. Quarterly updates only report totals, but you'll still need the underlying receipts if HMRC ever asks questions later.
• Diarise all four dates at the start of the tax year. Because the cadence is unfamiliar to most sole traders and landlords at first, it's worth setting reminders well ahead of each deadline rather than relying on memory.

What goes into each quarterly update

A quarterly update typically includes:

• Total income received in the period, by category
• Total allowable expenses, by category
• Any adjustments carried from digital records (not manual estimates)

It does not include personal allowances, other income sources, gift aid, or pension adjustments - those are dealt with at the final declaration stage, once you have the full-year picture. This is one reason quarterly updates feel lighter than a full Self Assessment return: they're a running total, not a tax bill.

What happens if you miss a quarterly update deadline

Late or missed MTD quarterly updates fall under HMRC's points-based penalty system, where repeated lateness accumulates points before a financial penalty is triggered. For quarterly filers this means a penalty point per missed deadline, with a £200 fine once you reach 4 points; points expire automatically after 24 months of on-time filing, or you can reset to zero sooner by completing a fresh compliance period with everything filed on time. We cover this in detail in our guide to MTD penalties, including how the points system resets and what counts as a reasonable excuse.

Staying in control of what gets sent each quarter

A four-times-a-year filing cadence understandably makes people nervous about oversharing with HMRC. Here's the reality: a quarterly update only ever contains the summarised totals for that period - not a live feed of every invoice, receipt, or bank line you've recorded.

WDI Billing keeps that boundary explicit through three modes:

• Records - your day-to-day bookkeeping: invoices, expenses, receipts, bank data. This lives in your account and goes nowhere on its own.
• Prepare - the default mode. As each quarter closes, WDI Billing compiles the update from your records and shows you exactly what it contains, in full, before anything is sent anywhere.
• File - you review the prepared figures and press submit. Nothing streams to HMRC automatically in the background; the quarterly update only leaves your account when you choose to send it.

That "you press file" principle matters even more with quarterly cadence than it did with annual returns - four submission points a year means four opportunities to check the figures are actually right, not four automated pushes you have to trust blindly.

Quarterly updates vs the final declaration

It's easy to conflate the two, so to be clear:

Both stages sit within MTD for Income Tax, and both need compatible software behind them - but they serve different purposes, and neither replaces the other.

Who actually has to submit MTD quarterly updates

Not everyone with self-employment or property income is in scope yet - it depends on your qualifying income, which is being phased in over several years. If you're not sure whether you're affected this year, read our guide to MTD qualifying income for the current thresholds, or start with the broader overview in what is Making Tax Digital.

If you're a sole trader working out how quarterly updates fit around your existing routine, our Making Tax Digital for sole traders guide walks through the practical side in more depth.

Preparing quarterly updates without the stress

The businesses that find quarterly updates painless are the ones whose records are already tidy between deadlines - not the ones scrambling to reconstruct three months of expenses the week before submission. Keeping your bookkeeping current in Records mode throughout the quarter means Prepare mode has almost nothing to do except summarise what's already there, and File mode becomes a one-click confirmation rather than a leap of faith.

WDI Billing's Making Tax Digital software is built around this rhythm: digital records feed straight into each quarterly update, nothing is transmitted until you review and submit it, and your full transaction history stays exportable and yours if you ever want to move on. If your income also involves VAT, our MTD VAT software handles the parallel VAT return cycle using the same underlying records.

Can you correct a quarterly update after submitting it?

Mistakes happen, especially while you're getting used to a new cadence. In most cases a quarterly update can be amended after submission, provided you do so within the window HMRC allows before the final declaration is due. The safest habit is still to catch errors before you press submit in the first place - reviewing the prepared totals against your own records for the quarter takes a few minutes and avoids the extra step of filing a correction later.

If you do spot something wrong after the fact, it's generally better to correct it as soon as you notice rather than waiting for the final declaration to sweep it up - small errors are easier to explain and fix quarter by quarter than reconstructed months later.

Multiple businesses, multiple quarterly updates

If you have more than one self-employment or a property business alongside it, each one may need its own quarterly update rather than a single combined figure. This is one of the details that catches people out when they move from a single annual Self Assessment return - covering everything in one document - to MTD's per-business quarterly structure. Good software should keep these separate automatically rather than leaving you to split the totals by hand each quarter.

Try WDI Billing for your next quarterly update

See how straightforward MTD quarterly updates can be when your records, your review, and your filing all happen in one place - on your terms. Start a free trial of WDI Billing and prepare your next quarterly update without giving up control of your books.