How to Submit a Quarterly Update to HMRC: No Jargon
Learn exactly how to submit your MTD quarterly update to HMRC, what figures you need, when deadlines fall, and what happens if you miss one.
Your first MTD quarterly update deadline arrives one month after your quarter closes. Miss it, and HMRC starts counting penalty points immediately. So let's make sure that does not happen.
This post is a practical walkthrough of how to submit a quarterly update to HMRC under Making Tax Digital for Income Tax. Not a policy overview, not a history of MTD delays (there have been many), and not a sales pitch for expensive software. Just the mechanics, plainly explained, with the numbers that actually matter to a sole trader turning over £50,000 or more.
- MTD quarterly updates require four submissions per year, plus a final declaration, using HMRC-approved software.
- Each quarterly period closes on specific dates; your submission is due one month after the period ends.
- You submit income and expenses totals only, not individual invoices or receipts.
- Missing a deadline earns a penalty point; accumulate four points and HMRC issues a £200 fine.
- You do not pay tax quarterly. The update is informational. Your tax bill is still settled via Self Assessment.
- MTD Quarterly Update
- A digital submission made to HMRC four times per year under Making Tax Digital for Income Tax. Each update reports the totals of your business income and expenses for a three-month period. It does not trigger a tax payment; it feeds into your annual tax calculation.
What a Quarterly Update Actually Is (and Is Not)
There is a stubborn misconception that quarterly updates are four mini tax returns. They are not. HMRC does not collect money from you every three months. You are simply telling HMRC, digitally and regularly, what your business has earned and spent. Think of it as a running tally, not a bill.
The actual tax payment timeline stays the same: your balancing payment is due by 31 January following the tax year, and your first payment on account (if applicable) follows the same schedule it always has. What changes under MTD is the reporting cadence and the method. Paper and spreadsheets sent via email are out. HMRC-approved software is in.
This distinction matters because it affects how much stress you should attach to each submission. Getting the quarterly update roughly right is important. Getting it to the penny, with every receipt individually logged, is not what HMRC requires at this stage. The granular detail comes in your End of Period Statement and Final Declaration.
The Four Quarterly Periods: When Your Clock Starts
HMRC assigns you a set of quarterly periods based on your accounting period. Most sole traders operate on the standard tax year, which runs from 6 April to 5 April. Under MTD, the standard quarterly periods are:
- Quarter 1: 6 April to 5 July, due by 5 August
- Quarter 2: 6 July to 5 October, due by 5 November
- Quarter 3: 6 October to 5 January, due by 5 February
- Quarter 4: 6 January to 5 April, due by 5 May
HMRC also offers calendar quarter alignment, which some software vendors prefer because it simplifies bookkeeping. If your software uses calendar quarters, your periods run to the end of each month (June, September, December, March) and your deadlines shift accordingly. Check which option your software uses before you assume a deadline.
The point is that you have approximately one month between the period closing and the submission deadline. For a busy electrician or plumber who invoices weekly, that should be enough time to pull figures together, provided your records are already digital. If you are still logging jobs on paper and entering them into a spreadsheet once a quarter, the deadline will feel much tighter.
What You Actually Need to Submit
Here is the practical relief: a quarterly update requires totals, not transaction lists. You submit:
- Total business income for the quarter
- Total allowable business expenses for the quarter, broken into HMRC's standard categories
The expense categories HMRC uses align with those on the Self Assessment SA103 form. They include things like:
- Materials and goods purchased for resale
- Wages and subcontractor costs
- Motor expenses
- Office and administrative costs
- Professional fees
- Repairs and maintenance
- Travel and accommodation
- Advertising and marketing
You do not upload receipts. You do not attach invoices. You report the sum of each category for the period. The underlying records, your invoices, receipts, and bank statements, must be stored digitally in case HMRC asks to see them, but they do not travel with the submission itself. For more on what HMRC expects you to keep, the post on Sole Trader Bookkeeping Requirements: What HMRC Actually Demands covers the retention rules in detail.
What If Your Figures Are Estimates?
HMRC has confirmed that quarterly updates can include estimated or provisional figures if you do not have everything finalised. You correct any discrepancies in your End of Period Statement at the tax year end. This is not a licence for wild guessing, but it does mean you do not need to delay a submission because one supplier invoice has not arrived yet. Submit what you have, note the estimate, and correct it later.
How to Actually Make the Submission
You cannot submit a quarterly update through HMRC's own website. This is deliberate policy, and it is worth naming clearly: HMRC has chosen not to build a free submission tool for individuals, which means every sole trader must use third-party commercial software to comply. The implications of that choice are explored in the post on MTD Record Keeping Software: What HMRC Won't Build for You.
The submission process through any MTD-compatible app follows the same general steps:
Step 1: Connect your software to HMRC. This happens once, during setup. You authorise the app to communicate with HMRC's API on your behalf. If you have already signed up for MTD, this connection should already exist. If not, the post on How to Sign Up for MTD Before HMRC Signs You Up walks through the registration process.
Step 2: Categorise your income and expenses during the quarter. Good software makes this ongoing rather than a quarterly scramble. Snap a photo of a receipt, log a payment, reconcile a bank feed. Thirty seconds at the time of the transaction saves thirty minutes at the end of the quarter.
Step 3: Review the quarter summary. Before submitting, your software will show you the totals per category. Check for obvious errors: a £4,500 materials cost accidentally entered as £45,000, a refund that has not been offset. This review typically takes five to ten minutes if your records are current.
Step 4: Submit. A single button in your MTD software sends the figures to HMRC via their API. You receive a confirmation reference. Keep it. HMRC's systems can occasionally show discrepancies and having the reference number is your proof of submission.
Step 5: Wait for HMRC's tax estimate. After each submission, HMRC will show you an updated estimate of your tax liability for the year. This is indicative, not a bill, but it is useful for budgeting. If the estimate looks wildly wrong, it is worth reviewing your categorisation rather than assuming HMRC's maths is at fault.
The Penalty System: How Points Accumulate
HMRC moved away from immediate financial penalties for late quarterly updates in favour of a points-based system. Each missed deadline earns one penalty point. Once you accumulate four points, HMRC issues a £200 fine. You then face an additional £200 penalty for every subsequent missed submission until you clear the points.
Points expire after a period of compliance. Specifically, you need to submit all outstanding updates and maintain a clean record for 24 months (for quarterly obligations) before your points reset to zero. This means a bad six-month spell can follow you for two years.
For a sole trader earning £60,000 a year, the £200 fine is annoying but not catastrophic. The real cost is the compounding effect of disorganised records that led to the missed deadline in the first place. Catching up on four quarters of bookkeeping in a panic is far more expensive in time than thirty minutes per quarter done properly.
The End of Period Statement and Final Declaration
After your four quarterly updates, MTD requires two additional steps before the tax year is closed.
The End of Period Statement (EOPS) is where you finalise your income and expenses for the year, make any adjustments (such as claiming capital allowances or adjusting for private use of a business asset), and confirm that the figures are accurate. This is your equivalent of the current Self Assessment process, conducted digitally through your software.
The Final Declaration replaces the Self Assessment tax return. It confirms all your income sources for the year, including any non-business income, and crystallises your tax liability. The deadline for the Final Declaration is 31 January following the tax year end, the same date as the current Self Assessment deadline.
The tax you owe is still paid by 31 January (with payments on account due 31 January and 31 July if applicable). MTD changes how you report; it does not change when you pay.
People also ask
A Concrete Example: Marcus the Electrician
Marcus is a self-employed electrician based in Bristol. His annual turnover is around £68,000. He started MTD in April 2026.
His first quarterly period runs from 6 April to 5 July 2026. During that time he invoices £16,200 in labour and materials. His costs include £3,400 in materials, £1,100 in van running costs, £480 in public liability insurance, and £250 in tool purchases.
By the time 5 August rolls around, Marcus opens TapTax, reviews the auto-categorised figures pulled from his bank feed, corrects one materials entry that was miscategorised as office costs, and hits submit. Total time: eleven minutes. HMRC confirms receipt and shows an estimated tax liability of £14,800 for the year so far, which Marcus knows is based on an annualised projection of one quarter.
He does not pay anything. He does not panic. He sets a calendar reminder for 5 November and gets back to work.
That is what a smooth quarterly update looks like. It is not glamorous, but it is not the bureaucratic nightmare many sole traders fear either, provided the software handles the heavy lifting.
Choosing Software That Does Not Overcomplicate This
The quality of your quarterly submission experience depends almost entirely on the software you use. Some platforms built for accountants and mid-sized businesses are technically MTD-compliant but present sole traders with dashboards designed for someone with a finance team. Others are priced for that market too.
For a sole trader whose main need is to log income and expenses, categorise them correctly, and submit four times a year without a spreadsheet or a degree in accountancy, simpler is better. The post on Best Tax App for Sole Traders UK: Cut Through the Noise covers what to look for, and Cheapest Accounting Software for Sole Traders: Real Costs breaks down what you should actually expect to pay.
The short version: you should not be paying more than £15 per month for software that does exactly what MTD requires and nothing more. If your software is charging you for payroll features, multi-currency support, or inventory management you will never use, you are funding someone else's product roadmap.
Your Next Step Before the First Deadline Arrives
If your MTD start date is April 2026 and you have not yet chosen software or connected it to HMRC, your first submission window opens in July 2026 and closes 5 August 2026. That is not far away.
The one concrete action to take today: check whether your current software is on HMRC's list of approved MTD for Income Tax products. If it is not, or if you do not have software at all, start a free trial of something simple now. Do not wait until July to discover that bank feed connections take two weeks to verify or that your preferred app does not support sole trader accounts.
The first quarterly update is always the one that takes longest, because you are learning a new process on top of running a business. Every one after that gets faster. Marcus figured out eleven minutes. You can probably beat that.
You might also like
Ready to simplify your tax filing?
Join the waitlist and be the first to know when TapTax launches.