What is a quarterly update?
Under Making Tax Digital for Income Tax, sole traders no longer file a single annual tax return. Instead, you submit four quarterly updates throughout the year — summaries of your business income and expenses for each three-month period.
A quarterly update is not a tax payment and it doesn't produce a tax bill. It's a digital record of what you've earned and spent, sent to HMRC through your MTD software. Think of it as checking in with HMRC four times a year rather than once.
Your actual tax liability is calculated and confirmed at the end of the year, when you complete your Final Declaration.
What does Quarter 1 cover?
The first quarter of the 2026/27 tax year runs from 6 April 2026 to 5 July 2026. Your submission deadline is one month later: 5 August 2026.
| Quarter | Period covered | Submission deadline |
|---|---|---|
| Quarter 1 | 6 April – 5 July 2026 | 5 August 2026 |
| Quarter 2 | 6 July – 5 October 2026 | 5 November 2026 |
| Quarter 3 | 6 October 2026 – 5 January 2027 | 5 February 2027 |
| Quarter 4 | 6 January – 5 April 2027 | 5 May 2027 |
Right now: Quarter 1 is already underway. Every transaction from 6 April onwards is part of the period you'll need to report. The sooner your records are in order, the easier the submission will be.
What do you need to submit?
Your quarterly update contains a summary of your business finances for the quarter:
- Total income — everything you received from clients or customers between 6 April and 5 July
- Expenses by category — costs like office expenses, travel, equipment, professional fees, and so on, totalled by type
You do not need to send invoices, receipts, or bank statements — just the totals. You keep the underlying records yourself digitally, and HMRC can request them if they open an enquiry. But for the submission itself, it's a summary only.
The expense categories HMRC uses are broadly the same as the ones you'll be familiar with from Self Assessment, such as: cost of goods sold, employee costs, office costs, travel and subsistence, advertising, professional fees, and depreciation (if on accruals basis).
What you don't need to do yet
It's worth being clear about what a quarterly update is not:
- It is not a tax return
- It does not trigger a tax payment
- It does not include personal income, reliefs, or allowances
- It is not your final word on the year's figures — you can make adjustments later
All of those elements come at the end of the year through the End of Period Statement and Final Declaration process. In August, you're just submitting your Q1 income and expense totals.
How to submit
Quarterly updates must be submitted through HMRC-recognised MTD software. You cannot file a quarterly update directly on the HMRC website.
Your software will connect securely to HMRC's MTD API using your Government Gateway credentials. Once connected, submitting a quarterly update takes just a few minutes — your software pulls in your transaction data, you review the income and expense totals, and you confirm.
Don't have MTD software yet? You need to sign up before you can submit. With the 5 August deadline approaching, now is the time to get set up — leaving it until July risks missing the deadline entirely.
What happens if you miss the deadline?
HMRC uses a points-based penalty system for late quarterly submissions. Miss a deadline and you receive one penalty point. Accumulate four points and a £200 fine is triggered — with further fines every 30 days after that.
Points expire after 24 months, but your record resets to zero only once you've submitted on time for a full year. The system is designed to be lenient for isolated mistakes but proportionate for persistent non-compliance.
What to do right now
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Get your MTD software in place If you haven't already, choose and sign up for HMRC-recognised MTD software. Connect it to your Government Gateway account and, if applicable, your business bank account.
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Catch up on your records from 6 April Make sure all income and expenses from 6 April onwards are recorded digitally. If you've been keeping records in a spreadsheet or on paper, now is the time to get them into your MTD software.
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Set a reminder for late July Quarter 1 ends 5 July. Give yourself a few days after that to review your figures and submit before the 5 August deadline. A week's buffer is plenty.
Don't let the 5 August deadline creep up on you
Bart connects to your bank and keeps a running digital record of your income and expenses throughout the quarter — so when the deadline arrives, your submission is already prepared. No scramble, no spreadsheets.
Try Bart freeFrequently asked questions
Do I need to send receipts to HMRC in my quarterly update?
No. You submit a summary of your income and expenses — totals by category. You don't attach invoices, receipts, or bank statements. You do need to keep those records digitally yourself, in case HMRC opens an enquiry, but they are not submitted with your update.
What if I haven't chosen my MTD software yet?
You need to sign up now. MTD quarterly updates must be submitted through HMRC-recognised software — you cannot file directly on the HMRC website. With the 5 August deadline approaching, you have time to get set up, but don't leave it until July.
What counts as income in my quarterly update?
Your self-employment turnover — all money received from clients or customers during the quarter (6 April to 5 July for Quarter 1). Under cash basis accounting, you record income when you receive it, not when you invoice. If you're on the accruals basis, you record it when it was earned.
Is the quarterly update the same as my tax return?
No. The quarterly update is just an income and expense summary. It does not calculate your tax bill. Your tax liability is only confirmed when you complete the Final Declaration at the end of the tax year (due 31 January 2028). The quarterly updates feed into that, but no payment is triggered by submitting them.