MTD Quarterly Updates Explained: What, When and How to Submit

The quarterly update is the defining feature of Making Tax Digital for Income Tax. Four times a year, instead of once, you send HMRC a summary of your income and expenses through MTD-compatible software. It is a rhythm rather than a single annual event, and for most UK landlords and sole traders it will be a new habit to build.

Quarterly updates are not mini tax returns. They do not calculate your tax, and you do not make any tax payments based on them. They are data submissions — a way for HMRC to see how your business is tracking through the year, and to give you visibility over your likely tax position in real time rather than 10 months after the fact.

This post walks through everything you need to know about quarterly updates: the content, the deadlines, the categories, how cumulative reporting works, when you can elect for calendar quarters, and the early submission option. By the end you should feel confident about what a quarterly update is and how to approach your first one.

What a quarterly update actually contains

A quarterly update is a summary of your business income and expenses for the period, broken down by category. It is generated automatically by your MTD-compatible software from the digital records you have kept through the quarter.

For trading businesses (sole traders), the update includes:

• Business income — turnover plus any other business income
• Cost of goods sold
• Subcontractor payments (including any CIS deductions)
• Wages, salaries, and staff costs
• Car, van, and travel expenses
• Rent, rates, power, and insurance
• Repairs and maintenance
• Phone, stationery, and office costs
• Advertising and entertainment
• Bank interest paid
• Bank charges
• Accountancy, legal, and professional fees
• Other allowable expenses
• Consolidated expenses (if using three-line accounting)

For property businesses (landlords), the update covers:

• UK property income — total rent, plus any other income such as service charges, lease premiums, and reverse premiums
• Rent, rates, insurance, and ground rents
• Repairs and maintenance
• Non-residential finance costs (commercial property only)
• Residential finance costs (typically mortgage interest)
• Residential finance costs brought forward from prior years
• Legal, management, and professional fees
• Services and wages paid
• Travel costs
• Other allowable expenses
• Consolidated expenses (if using three-line)

Foreign property income uses the same structure but with separate totals.

Each category in the update is a pound figure summarising the transactions in your digital records for the period. You do not provide individual transaction detail — HMRC just sees the category totals.

The quarterly deadlines

Under MTD IT, the standard quarters run from 6 April:

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

Each deadline falls one month and two days after the end of the quarter. That gives you roughly five weeks to finalise your bookkeeping for the quarter, reconcile your records, and submit through your software.

If you prefer, you can elect to use calendar quarters instead (1 April to 30 June, 1 July to 30 September, 1 October to 31 December, 1 January to 31 March). The deadlines remain the same — 7 August, 7 November, 7 February, and 7 May. The calendar quarter election must be made before the first quarterly update of the tax year, and once made it stays in force until withdrawn.

Cumulative figures

Here is a detail that catches many people out. Quarterly updates are cumulative — each one runs from the start of the tax year to the end of the quarter in question.

Your Q1 update covers 6 April to 5 July — a quarter of figures. Your Q2 update covers 6 April to 5 October — two quarters of figures combined. Your Q3 update covers 6 April to 5 January, and your Q4 update covers the whole year (6 April to 5 April).

This means the Q4 update effectively contains the full year's figures at the category level. It is not a summary of the fourth quarter on its own; it is a summary of the entire tax year.

The cumulative approach has a useful consequence: corrections to earlier quarters can simply be absorbed into the next update. If you realise in August that you missed some June expenses out of your Q1 update, you add them to your digital records and they flow naturally into the Q2 update. No separate correction submission is needed.

Correcting errors

Errors discovered after a quarterly update has been submitted are corrected by making sure the accurate figures are in your digital records and letting them flow into the next update. HMRC guidance is explicit that errors should be corrected as soon as possible and picked up in the next quarterly update.

This is one of the benefits of the cumulative approach. You do not need to file an amended Q1 update — you just make sure Q2 contains the right figures, which because they are cumulative will reflect any corrections to Q1 automatically.

If the error is substantial, or relates to a previous tax year, you may need to make a specific correction through other channels. For most routine errors, though, letting them wash through the next cumulative update is fine.

Early submission

You can submit a quarterly update up to 10 days before the quarter ends, provided you are confident there are no further transactions coming in during those 10 days.

This is useful in several scenarios:

• You are going on holiday over the normal submission window and want to get it out of the way early.
• You are a very simple business (such as a landlord with one property on fixed rent) and your transactions for the quarter are effectively complete.
• You are managing multiple submissions for different businesses and want to space them out.

Be careful with early submissions. If a late invoice or a last-minute expense lands in the final 10 days, you will need to include it in the next cumulative update (which happens naturally). But if the transaction significantly changes the Q1 picture, the late-arriving data will only appear on the Q2 submission. For most businesses this is fine, but if you expect significant quarter-end activity, it is usually better to submit right at the end of the period.

Zero updates

If you have had no transactions in a quarter — a landlord whose property was empty and had no expenses, for example — you still need to submit a quarterly update. The submission just shows zeros (or the cumulative position from earlier quarters if the business was active earlier in the year).

A zero update counts as a submission for penalty point purposes. If you don't file a zero update when you should, you earn a penalty point just as if you had data to submit and failed to.

The relationship to the final declaration

At the end of the tax year, a separate final declaration is due by 31 January. This replaces the old Self Assessment return.

The final declaration is different from the Q4 quarterly update, even though they cover overlapping periods. Q4 is a cumulative data submission running to 5 April. The final declaration is the formal year-end return that brings in:

• Accounting adjustments — closing stock, accrued income, prepayments.
• Reliefs and allowances — capital allowances, losses carried forward.
• Personal income from other sources — employment income, dividends, pensions, savings interest.
• A declaration that the information is correct and complete.

The final declaration is where your tax is actually calculated. The quarterly updates are a prelude to it, not a substitute.

Practical tips for quarterly updates

Some practical suggestions for managing quarterly updates well:

• Keep your records current through the quarter. Don't leave entry until deadline week. Aim to have each transaction recorded within a few days of it happening.
• Reconcile to your bank statement. At the end of each month, make sure every bank transaction is in your digital records. This catches errors early.
• Review the software's categorisation. Most modern MTD software auto-categorises transactions based on rules. Review them regularly — incorrect categorisation that flows through to your update can create issues later.
• Don't submit on the deadline day itself. Leave at least a day or two buffer for technical issues or last-minute corrections.
• Keep a log of what you submitted. A simple record of the figures in each quarterly update, and when it was filed, helps if any queries come up later.
• Don't treat zero quarters casually. If your business is dormant or on pause, still file on time — zero is a valid data point, but silence is a penalty point.

Frequently Asked Questions

Q: Do I pay tax with each quarterly update? A: No. Quarterly updates are data submissions only. Tax is paid through the existing mechanisms — payments on account (31 January and 31 July) and the balancing payment on 31 January after the end of the tax year. MTD has not changed how or when tax is paid.

Q: Can I change from standard quarters to calendar quarters mid-year? A: Not mid-year. The calendar quarter election must be made before the first quarterly update of the tax year, and stays in force until you withdraw it. You can switch at the start of the next tax year.

Q: What happens if I discover an error after I have submitted? A: Correct the error in your digital records and let the updated figures flow into the next cumulative quarterly update. You don't need to file an amended version of the earlier update — the cumulative structure absorbs corrections naturally.

Q: Do I need to submit a quarterly update if my business hasn't traded that quarter? A: Yes. Zero or near-zero updates are still required. Missing a submission — even one showing no activity — earns a penalty point.

Q: Can I prepare quarterly updates myself without an accountant? A: Yes. MTD-compatible software is designed to make this achievable for individual sole traders and landlords. An accountant can still help with the final declaration (which is more complex) and with setting up your systems initially, but the quarterly rhythm can be self-managed.

Conclusion

Quarterly updates are the practical heart of MTD for Income Tax. They are not complex in isolation — a cumulative summary of your income and expenses in defined categories — but they require a new rhythm of bookkeeping. Record transactions promptly, reconcile regularly, don't leave submissions to the last day, and handle zero quarters properly. Get the rhythm right, and the quarterly updates become a background task rather than a source of stress. Miss the rhythm, and they become a recurring pressure point that never quite goes away.