Quarterly updates explained: what to submit and when

Under Making Tax Digital for Income Tax, sole traders and landlords must send HMRC a summary of their income and expenses four times a year. These are called quarterly updates. Here's everything you need to know about what to submit, when it's due, and what happens if you're late.

Standard quarters

Most people will use standard quarters, which follow the tax year (6 April – 5 April). After each quarter ends, you have one month to submit your update.

Calendar quarter alternative

If your accounting period already uses calendar months, you can opt for calendar quartersinstead. This can be helpful if you submit VAT returns on a calendar basis and want to align.

What do I actually submit?

Each quarterly update is a summary of income and expenses for the period, broken down into HMRC's standard categories. You don't send individual receipts — just the totals.

From 2026–27 onwards, quarterly updates are cumulative. This means each submission includes all transactions from 6 April, not just the latest quarter. Your software calculates this automatically.

HMRC expense categories

When submitting quarterly updates, expenses are grouped into these categories:

A practical example

Sarah is a freelance web developer earning roughly £65,000 per year. She uses standard tax year quarters. Here's how her first year of MTD looks:

Q1: 6 April – 5 July 2026

Sarah invoices clients for a total of £18,200 and spends £3,400 on software subscriptions, equipment, and professional development. By 5 August, she submits her Q1 update showing £18,200 income and £3,400 expenses.

Q2: 6 July – 5 October 2026

She invoices another £15,800 and has £2,900 in expenses. Her Q2 update (due 5 November) includes cumulative totals: £34,000 income, £6,300 expenses.

Q3 & Q4

The pattern continues. Each quarterly update includes year-to-date figures. After Q4, Sarah reviews her annual summary, makes any adjustments (capital allowances, private use), and submits her final declaration by 31 January 2028.

Late submissions: the penalty system

MTD introduces a points-based penalty system that replaces the old fixed penalties:

• Each late quarterly update earns 1 penalty point
• At 4 points, you receive a £200 penalty for each further late submission
• Points expire after 24 months of full compliance

After Q4: the final declaration

Once all four quarterly updates are submitted, you'll need to:

1. Review your annual summary — check totals, make adjustments for capital allowances, private use, etc.
2. Add other income — employment, dividends, savings, pensions, capital gains
3. Submit your final declaration — this replaces the annual Self Assessment tax return
4. Pay any tax owed — the deadline is 31 January following the end of the tax year

The final declaration for 2026–27 is due by 31 January 2028.

How Regulas helps

Regulas is built specifically for quarterly MTD submissions:

• Deadline tracking — see your next quarterly deadline at a glance
• One-click submission — submit directly to HMRC from your dashboard
• Cumulative calculation — we calculate year-to-date figures automatically
• Category mapping — transactions are mapped to HMRC categories as you enter them
• Live tax estimate — see your estimated tax liability update in real time