Making Tax Digital (MTD) requires you to submit four quarterly updates to HMRC each tax year, summarising your income and expenses for each three-month period. Quarterly submissions replace the single annual Self Assessment return with more frequent, digital reporting.
This guide explains what to include in each quarterly submission, the deadlines, and how to complete your updates correctly.
What Are MTD Quarterly Submissions?
Under MTD, you report your income and expenses to HMRC four times per year, once for each quarter of the tax year. Each submission is a summary of your business activity during that three-month period.
What Quarterly Submissions Include
Each quarterly update reports:
- Total income received during the quarter
- Total expenses by category (not individual transactions)
- Running totals for the tax year to date
HMRC does not receive individual receipts or bank transactions—only category totals.
What Quarterly Submissions Do NOT Include
Quarterly submissions are summaries, not full tax returns. They do not include:
- Individual transaction details
- Personal allowances or reliefs
- Final tax calculations
- Payment amounts
These are handled in your final declaration at year-end.
Quarterly Submission Deadlines
Each tax year has four quarterly periods with submission deadlines approximately one month after each quarter ends:
| Quarter | Period Covered | Submission Deadline | |---------|---------------|---------------------| | Q1 | 6 April – 5 July | 7 August | | Q2 | 6 July – 5 October | 7 November | | Q3 | 6 October – 5 January | 7 February | | Q4 | 6 January – 5 April | 7 May |
First Year Deadlines (2026/27)
For those in the first MTD wave (income over £50,000), the 2026/27 tax year deadlines are:
| Deadline | Action | |----------|--------| | 6 April 2026 | MTD begins—start digital record-keeping | | 7 August 2026 | Submit Q1 (6 Apr – 5 Jul 2026) | | 7 November 2026 | Submit Q2 (6 Jul – 5 Oct 2026) | | 7 February 2027 | Submit Q3 (6 Oct 2026 – 5 Jan 2027) | | 7 May 2027 | Submit Q4 (6 Jan – 5 Apr 2027) | | 31 January 2028 | Final declaration |
What to Report: Income
Report all business income received during the quarter.
Self-Employment Income (SA103)
For sole traders, report:
- Sales and fees — money received for goods or services
- Other business income — interest on business accounts, grants, etc.
Report income when received, not when invoiced (unless using accruals accounting).
Example Q1 Report: | Income Category | Amount | |-----------------|--------| | Sales/fees received | £12,500 | | Other income | £150 | | Total Q1 income | £12,650 |
Property Income (SA105)
For landlords, report:
- Rental income — rent received from tenants
- Other property income — insurance payouts, grants
Example Q1 Report: | Income Category | Amount | |-----------------|--------| | Rental income received | £4,500 | | Other property income | £0 | | Total Q1 income | £4,500 |
Multiple Income Sources
If you have both self-employment and property income, report each separately within the same quarterly submission.
What to Report: Expenses
Report allowable business expenses incurred during the quarter, organised by category.
Expense Categories
Your MTD software will categorise expenses. Common categories include:
| Category | Examples | |----------|----------| | Cost of goods sold | Stock, materials, direct costs | | Office costs | Stationery, phone, software subscriptions | | Travel | Mileage, public transport, parking | | Professional fees | Accountant, legal, consultants | | Marketing | Advertising, website, PR | | Premises | Rent, utilities, insurance | | Staff costs | Wages, employer NI, pensions | | Financial costs | Bank charges, interest | | Other expenses | Miscellaneous business costs |
Expense Timing
Report expenses when paid, not when invoiced (unless using accruals accounting).
Example Q1 Expenses: | Expense Category | Amount | |------------------|--------| | Office costs | £320 | | Travel | £485 | | Professional fees | £250 | | Marketing | £180 | | Other expenses | £95 | | Total Q1 expenses | £1,330 |
Home Office Expenses
If you work from home, include your home office claim in the appropriate category:
- Simplified expenses: Flat rate based on hours worked (£10-£26/month)
- Actual costs: Business proportion of household bills
Learn more: Working From Home Tax Relief
How to Submit Quarterly Updates
Step 1: Review Your Transactions
Before submitting, review all transactions for the quarter:
- Check all income is recorded
- Verify expenses are categorised correctly
- Ensure no personal transactions are included
- Confirm dates fall within the quarter
Step 2: Check Totals
Your MTD software calculates totals automatically. Verify:
- Total income matches your bank deposits
- Total expenses matches your business spending
- Categories look reasonable
Step 3: Submit to HMRC
Using your MTD software:
- Select the quarter to submit
- Review the summary
- Confirm and submit
- Software sends data to HMRC via the MTD API
- Receive confirmation
With TaxFolio, this is a one-click process after reviewing your figures.
Step 4: Keep Confirmation
Save your submission confirmation showing:
- Date and time submitted
- Quarter covered
- Summary of figures submitted
- HMRC reference number
Amending Quarterly Submissions
If you discover errors after submitting, you can amend your quarterly update:
Before the Deadline
Simply submit a corrected update. The new submission replaces the previous one.
After the Deadline
You can still submit amendments, but:
- The late submission itself may incur a penalty point
- Corrections should be made as soon as errors are discovered
At Final Declaration
Your final declaration confirms your complete, accurate figures for the year. Any corrections needed from quarterly submissions can be finalised at this stage.
Quarterly Submission Penalties
HMRC uses a points-based penalty system for late quarterly submissions:
How Points Work
| Late Submissions | Penalty Points | Financial Penalty | |------------------|----------------|-------------------| | 1st late | 1 point | None | | 2nd late | 2 points | None | | 3rd late | 3 points | None | | 4th late | 4 points | £200 | | 5th late | 5 points | £200 | | 6th+ late | 6+ points | £200 each |
For quarterly submissions (4 per year), the penalty threshold is 4 points.
Removing Points
Points expire after 24 months of consecutive on-time submissions. For quarterly reporting, this means 8 consecutive on-time updates.
Avoiding Penalties
- Set reminders — calendar alerts 14 days and 7 days before deadlines
- Use software with notifications — TaxFolio sends automatic reminders
- Submit early — don't wait until the deadline
- Keep records current — categorise transactions weekly, not quarterly
Quarterly Submissions vs Final Declaration
| Aspect | Quarterly Submissions | Final Declaration | |--------|----------------------|-------------------| | Frequency | 4 per year | 1 per year | | Deadline | ~1 month after quarter | 31 January | | Content | Income and expense summaries | Complete tax return | | Adjustments | Limited | Full adjustments and reliefs | | Tax calculation | Estimate only | Final calculation | | Payment | None | Tax payment due |
Quarterly submissions are progress reports. The final declaration is where you confirm everything and calculate your actual tax liability.
What Your MTD Software Should Do
For quarterly submissions, your HMRC-recognised software should:
| Feature | Purpose | |---------|---------| | Bank connection | Import transactions automatically | | Categorisation | Sort expenses into correct categories | | Quarter tracking | Know which transactions belong to which quarter | | Summary generation | Calculate totals for submission | | HMRC submission | Send data via MTD API | | Confirmation storage | Keep records of submissions | | Deadline reminders | Alert you before due dates |
TaxFolio handles all of this automatically.
Tips for Smooth Quarterly Submissions
1. Categorise Transactions Regularly
Don't wait until the deadline to categorise three months of transactions. Review weekly or fortnightly.
2. Reconcile with Bank Statements
Before submitting, check that your software's figures match your bank statements for the quarter.
3. Keep Business and Personal Separate
Use a dedicated business bank account. This makes categorisation clearer and reduces errors.
4. Document Unusual Items
If you have unusual income or expenses, note why. This helps if HMRC queries your submission.
5. Submit Early
Submitting a few days early gives you time to fix any issues before the deadline.
Example Quarterly Submission
Sarah: Freelance Designer, Q1 2026/27
Income (6 April – 5 July 2026): | Category | Amount | |----------|--------| | Design fees received | £14,200 | | Other income | £0 | | Total income | £14,200 |
Expenses (6 April – 5 July 2026): | Category | Amount | |----------|--------| | Software subscriptions | £180 | | Office supplies | £95 | | Travel (mileage) | £340 | | Professional fees | £200 | | Marketing | £150 | | Home office (simplified) | £78 | | Total expenses | £1,043 |
Q1 Summary:
- Gross income: £14,200
- Total expenses: £1,043
- Q1 profit: £13,157
Sarah submits this summary to HMRC via TaxFolio by 7 August 2026.
Quarterly Submissions with TaxFolio
TaxFolio makes quarterly submissions simple:
- Automatic bank import — transactions pulled from your bank daily
- AI categorisation — expenses sorted into correct categories
- Quarter tracking — see exactly what's included in each period
- One-click submit — send to HMRC via the MTD API
- Deadline reminders — notifications 14 and 7 days before
- Submission history — records of all submissions stored securely
Start your free 30-day trial and experience effortless quarterly reporting.