MTD quarterly updates

MTD quarterly updates: what you actually have to send

The phrase that frightens people about Making Tax Digital is “four times a year”, and it frightens them because it sounds like four tax returns. It is not. Knowing what a quarterly update actually contains is the difference between a ten-minute job and a dreaded one.

The thing most people get wrong

A quarterly update is a running summary of income and expenses to date — not a tax calculation, not a payment demand, and not a return you have to get right first time.

What you need to know

It is a summary, not a return

A quarterly update reports totals of income and expenses by category for the period. It does not work out what you owe, it does not ask for money, and it is not the point at which your figures become final. The tidying up — allowances, adjustments, anything your accountant does at the year end — happens once, afterwards, not four times.

Nothing is final until the end of the year

Because updates are cumulative, a figure entered in the wrong category in quarter one is corrected by the time the year closes rather than needing an amendment. That is worth knowing before the first one, because the fear of getting a submission wrong is what makes people put off starting — and a late start is the thing that actually costs money.

The deadlines, and the points

Updates follow quarterly periods through the tax year with a deadline about a month after each one ends, then the year is finalised after it closes. Missing a deadline earns a penalty point rather than an immediate fine; once four points have built up there is a £200 penalty. The system is built to tolerate one slip and to notice a habit.

Why the records matter more than the filing

The quarterly figures have to come from a digital record kept as you go. A business that invoices from a book and keeps receipts in a drawer has to build that record four times a year under time pressure; one whose quotes, invoices, payments and costs are already attached to the job they belong to has the totals as a by-product of working. The filing is the easy half.

Questions, answered

Is a quarterly update four tax returns a year?

No. It is a summary of income and expenses for the period, with no tax calculated and nothing to pay at that moment. The annual finalisation afterwards is the part that resembles a return, and there is still only one of those.

What happens if I get a quarterly figure wrong?

Updates are cumulative, so a mistake in an early quarter is corrected by a later one rather than needing a formal amendment. What you cannot fix retrospectively is a record that was never kept, which is why the habit matters more than the precision of any single submission.

Do I still do a Self Assessment return?

Not in the old form. The year is finalised through the Making Tax Digital service instead, where you confirm the figures and add anything the quarterly updates do not carry. Payment dates for the tax itself are not changed by any of this.

Does TaskMyJob submit these to HMRC?

No. TaskMyJob keeps the digital record — quotes, invoices, payments and costs against the job they belong to — and connects to Xero, QuickBooks and Sage, which submit. It is not on HMRC's recognised software list, and any job-management product claiming to be is worth checking against that list before you buy it.

Work out your own figure

The arithmetic on this page is free to use without an account — the Making Tax Digital checker runs the same code the invoices in TaskMyJob do, so what it shows you is what the software would put on the paperwork.

This is general information about how these rules work, not advice about your own affairs. Contracts can say something different, and your accountant knows your situation and this page does not.

See it being done

Step-by-step guides with a short recording of each one, free to read without an account.

Connect your accounting package

Xero, QuickBooks or Sage, so invoices do not get typed twice.

Read the reports without being misled

Profit, cash, debtors and hours — what each figure counts, and what it deliberately does not.

Take a payment

By card on their own page, or recording one that arrived another way.

All the guides and videos →

Also worth a look

The other two questions trades ask about getting paid.

Making Tax Digital

What MTD for Income Tax asks of a sole trader, which April catches you, and why the threshold is your turnover rather than your profit.

When nobody pays

The order to do things in, what a late commercial invoice is legally worth, and the one number that makes most people pay before it goes further.

All advice →

Try it on your own work

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