Quarterly updates do not mean filing four full tax returns a year. That’s the single biggest misunderstanding about Making Tax Digital (MTD) for Income Tax, and it puts people off before they’ve even started. 

What you actually send HMRC every three months is far simpler: a short summary of your income and expense totals, generated automatically by your software from the digital records you’ve already been keeping. No tax calculations, no adjustments, no reliefs to work out. Those come later, once a year. 

This guide explains exactly what a quarterly update contains, what HMRC does and doesn’t receive, how the cumulative system works, when the deadlines fall for 2026–27, and what to do if you’ve already missed one.

What Is an MTD Quarterly Update? 

An MTD quarterly update is a summary of your business income and expenses that you send to HMRC every three months through compatible software. According to HMRC, it is not a tax return. It’s a set of category totals drawn from your digital records, giving HMRC a running picture of how your self-employment or property business is doing across the year. 

You send one update per income source, per quarter. So if you have a single sole-trade business, that’s four updates a year. Each one takes minutes once your records are up to date, because the software does the adding up for you. 

What Do You Need to Submit in an MTD Quarterly Update? 

An MTD quarterly update contains totals for each of your income and expense categories for a business — not a list of individual transactions. Your software adds up the digital records you’ve kept and sends HMRC the summarised figures for each self-employment or property source you have. 

Here’s the important distinction, because it’s what most people worry about. 

Income information 

You report your business income totals for the period, summarised by the categories your software uses. For a sole trader, that’s essentially your takings; for a landlord, your rental income. You’re sending a total, not a breakdown of who paid you or what each payment was for. 

Expense information 

You report your allowable business expense totals, again summarised by category (for example, cost of goods, travel, premises costs, and so on). There’s a helpful easement here: according to HMRC, if your annual business turnover is below the VAT registration threshold (currently £90,000), you can report a single total for income and a single total for expenses without breaking expenses down into categories at all. This is sometimes handled through a “consolidated expenses” option in the software. 

One category that’s always treated separately is residential property finance costs, such as mortgage interest, because tax relief on it works differently. 

What HMRC actually receives 

This is worth being clear about: HMRC receives summarised category totals, not your individual transactions. Your software converts the underlying digital records into totals and submits those. HMRC doesn’t get a line-by-line feed of every sale and receipt. You may choose to keep more detail in your own records — who paid you, what a cost was for — but HMRC doesn’t require that detail in the update itself. 

Digital Records vs Quarterly Updates: What’s the Difference? 

It helps to separate the two things MTD asks of you. Digital records are the ongoing detail you keep in software as you trade. The quarterly update is the summary the software produces from those records and sends to HMRC. 

A digital record of a transaction generally needs to capture the amount, the date, and the category (income or the type of expense). That’s the raw material. The update is what’s built from it. 

The flow looks like this: 

Get the records right as you go, and the update itself is almost nothing — a review and a click. 

Are MTD Quarterly Updates Cumulative? 

Yes. MTD quarterly updates are cumulative, meaning each update covers the period from the start of the tax year up to the end of that quarter — not just the latest three months. By the time you send your fourth update, it reflects the whole year’s totals, and each submission effectively supersedes the one before it. 

HMRC’s guidance was clarified in 2026 to make this cumulative design explicit, and it matters for two practical reasons. First, you shouldn’t think of each update as a standalone three-month return. Second, it makes corrections easy: if you got something wrong in an earlier quarter, you fix the underlying record, and the corrected year-to-date figure simply flows through your next update. There’s no separate amendment to file. 

Example. Say you recorded £8,000 of income in your first update, then realised you’d missed a £500 invoice. You add it to your records. Your second update, which covers the year so far, now shows the corrected running total including that £500 — no need to go back and resubmit the first update. 

MTD Quarterly Update Periods and Deadlines 

Everyone within MTD reports to the same four deadlines, but there are two ways the periods themselves can be set. 

Standard update periods 

Standard periods run in line with the tax year: 6 April to 5 July, 6 July to 5 October, 6 October to 5 January, and 6 January to 5 April. This is the default. 

Calendar update periods 

If it suits your bookkeeping better, you can elect to use calendar quarters instead — periods ending 30 June, 30 September, 31 December and 31 March. You make this choice in your software before your first update of the tax year, and it then carries forward year on year until you change it back. The submission deadlines are the same either way. 

MTD Quarterly Update Deadlines for 2026–27 

The four standard submission deadlines for the 2026–27 tax year are fixed. Whether you use standard or calendar periods, these are the dates the update must reach HMRC by: 

You don’t have to wait until the deadline. Once an update period has ended you can submit any time before the deadline, and if you’re confident no further transactions are coming in, software generally lets you submit shortly before the period closes. Sending early is fine; sending a corrected running total later is handled naturally by the cumulative system. 

Missed the 7 August 2026 Deadline? What Happens Now? 

If you missed the first quarterly update deadline on 7 August 2026, the practical position is reassuring but not a free pass. According to HMRC, no penalty points are issued for late quarterly updates during the 2026–27 tax year — the first year has a soft-landing approach. But the update is still required, and you’ll need to have sent all your quarterly updates before you can file your year-end tax return. 

So the step now is simply to bring your records up to date and submit the outstanding update through your software as soon as you can. What the first-year concession does not cover is a late year-end tax return or late payment of tax — those still attract penalties and interest in the normal way. Treat the grace period as time to get your process working, not as permission to skip updates. 

Do You Need to Make Tax Adjustments Every Quarter? 

No. According to HMRC, you do not need to make accounting or tax adjustments before submitting a quarterly update. The update is a straightforward summary of income and expense totals from your records. Things like capital allowances, reliefs, private-use adjustments and other allowances are dealt with once, at the year-end — not four times a year. 

This is why your quarterly figures aren’t necessarily your final taxable profit. They’re a running snapshot. One common slip is putting a capital purchase, such as a new laptop or tools, into everyday expenses in an update. Capital items are usually claimed through capital allowances in the year-end process, not as expenses in the quarterly update, so it’s worth mapping your categories correctly from the start. 

What If You Make a Mistake in a Quarterly Update? 

Because updates are cumulative, correcting a mistake is refreshingly simple. If you enter the wrong amount, pick the wrong category, or spot a transaction you’d missed, you correct the record in your software as soon as you can, and the corrected year-to-date total carries through to your next update. There’s no separate correction form to submit. 

If you notice an error after your fourth and final update of the year, you can put it right as part of finalising your year-end return. The key habit HMRC expects is keeping your digital records accurate and correcting them promptly once you become aware of an error. 

What If You Have More Than One Business? 

If you run more than one business, you send a separate quarterly update for each self-employment and each property business you have. HMRC treats each income source separately for reporting, though they all feed into your single year-end position. 

Example. Someone who works as a self-employed plumber and also runs a separate driving-instructor business keeps digital records for each and submits an update for each business every quarter. They still have just one year-end tax return covering everything. 

If you start a new business part-way through the tax year, it’s brought into your reporting too. There’s a sensible detail in the penalty rules for later years: even if several updates for the same deadline are late because you run several businesses, that counts as a single penalty point for that deadline, not one per business. 

How Does Property Income Work With Quarterly Updates? 

Property income follows the same pattern — summarised income and expense totals sent each quarter for your property business — but with a couple of specific points. UK and foreign property are reported as separate sources. Residential property finance costs, such as mortgage interest, are recorded separately because the tax relief is given differently. 

For jointly let property, there’s a useful easement: joint owners can choose to report only their share of the rental income in their quarterly updates, and the default split is usually 50/50 unless a different beneficial interest has been declared to HMRC. If you’re primarily a landlord, our wider MTD guidance covers property in more detail; this article keeps the focus on how updates work across the board. 

How Do You Submit an MTD Quarterly Update? 

Quarterly updates are submitted directly to HMRC through MTD-compatible software. You cannot type them into your ordinary HMRC online account — the whole point of MTD is that the figures travel digitally from your records to HMRC. In practice the process is: 

1. Keep your digital records current through the quarter. 
2. Before the deadline, check your records are complete and correctly categorised. 
3. Let your software generate the income and expense totals for the period. 
4. Review the figures. 
5. Submit the update through the software. 
6. Check the tax estimate your software or HMRC account then shows, if you want a sense of your position. 

If your bookkeeping is tidy, steps three to five take minutes. 

What Happens After You Send an Update? 

After you submit an update, your software (or your HMRC online services account) can show an estimate of your tax bill based on the income and expenses reported so far. This is genuinely useful for budgeting, because it gives you a rough sense of your liability during the year rather than a surprise at the end. 

It’s important to treat that figure as an estimate, not a demand. It doesn’t include your year-end adjustments, reliefs, allowances or other income, so it isn’t your final tax liability, and no payment is triggered by sending an update. 

Do You Have to Pay Tax Every Quarter Under MTD? 

No. Reporting quarterly does not mean paying tax quarterly. MTD changes how often you report information to HMRC, not when you pay. Your Income Tax payment deadlines are unchanged — the usual 31 January balancing payment, and payments on account where they apply. The quarterly update is information only. 

Keeping reporting and payment separate in your mind is the key to not being thrown by MTD. Four updates, one tax return, and the same payment dates you’re used to. 

Can an Accountant Submit Quarterly Updates for You? 

Yes. An authorised agent, such as your accountant or bookkeeper, can keep your digital records and submit your quarterly updates on your behalf using compatible software. Many people who don’t want to manage the software themselves choose this route, so the reporting simply happens in the background. 

Sahi Accountancy can support clients with MTD-related bookkeeping and quarterly reporting where this forms part of the agreed service, which for a lot of self-employed people removes the ongoing admin entirely. 

MTD Quarterly Update Checklist 

• Keep digital records of income and expenses (amount, date, category) as you trade 

• Know which categories apply, and keep property finance costs separate 

• Remember updates are cumulative — year-to-date, not just the quarter 

• Don’t try to make year-end adjustments in a quarterly update 

• Submit one update per business or property source 

• Diarise the 2026–27 deadlines: 7 Nov 2026, 7 Feb 2027, 7 May 2027 

• If you missed 7 August 2026, submit it now — it’s still required 

• Treat the post-update tax figure as an estimate, not a bill 

• Keep your normal 31 January tax return and payment dates in view 

Frequently Asked Questions 

What do you submit in an MTD quarterly update? Summarised totals for your income and expense categories for each business or property source, generated by your software from your digital records. It’s a running year-to-date summary, not a list of individual transactions and not a tax return. 

Do I need to send every transaction to HMRC? No. HMRC receives category totals, not individual transactions. Your software adds up your digital records and submits the summarised figures. You keep the transaction-level detail in your own records. 

Are MTD quarterly updates the same as tax returns? No. A quarterly update is a summary with no tax adjustments or reliefs. You still complete one year-end tax return, due by 31 January, where adjustments, allowances and other income are dealt with. 

Are MTD quarterly updates cumulative? Yes. Each update covers from the start of the tax year to the end of that quarter, so your fourth update reflects the full year. This makes corrections easy — fix the record and the corrected total flows into your next update. 

Do I have to make tax adjustments every quarter? No. HMRC does not require accounting or tax adjustments before a quarterly update. Adjustments, capital allowances, reliefs and allowances are handled once, at the year-end. 

What happens if I miss a quarterly update deadline? Submit it as soon as you can. There are no penalty points for late quarterly updates in 2026–27, but the update is still required before you can file your tax return. Late returns and late payments still attract penalties. 

Do I pay tax after each quarterly update? No. Updates are information only. Your software may show an estimated tax figure, but it isn’t a demand, and your payment dates (31 January, and payments on account where relevant) don’t change. 

Can my accountant submit quarterly updates for me? Yes. An authorized agent can keep your records and submit your updates on your behalf through compatible software. 

Get Help Keeping Your MTD Records and Updates on Track 

The updates themselves are quick — but only if the digital records behind them are accurate and up to date. That’s where most of the real work sits. If you’d rather not manage the bookkeeping and quarterly submissions yourself, we can keep your records MTD-ready and handle the reporting for you as part of your bookkeeping and Self Assessment service. 

Book a free consultation and we’ll look at the simplest way to keep your MTD reporting running smoothly. 

Written by: Sahi Accountancy Last updated: 2 September 2026 

This article provides general information only and reflects HMRC and GOV.UK guidance as at August 2026. Individual tax circumstances vary and HMRC rules can change. Please obtain advice appropriate to your own circumstances before acting.