MTD Quarterly Update vs Tax Return: What HMRC Receives

The Short Version: Four Summaries, Then One Return

GOV.UK describes quarterly updates as totals of your self-employment and property income and expenses, and says of them: "they are summaries, not tax returns". Each one covers the tax year so far. Income of £10,000 in the first quarter and £8,000 in the second is reported as £10,000 on the first update and £18,000 on the second.

After the year ends you send one tax return, also called the final declaration, by the 31 January that follows it: 31 January 2028 for the 2026-27 tax year. That is where adjustments are made, your other income is added, and your tax for the year is worked out. GOV.UK lists what stays the same under Making Tax Digital: you still "submit one tax return every tax year" and "pay your tax bill as you do now".

What a Quarterly Update Contains

Totals per category, not transactions. GOV.UK says "Your quarterly updates will include totals for each income and expense category you used to create your digital records", and "HMRC will not receive details of individual receipts or invoices in your quarterly updates." The categories are the ones Self Assessment already uses. The self-employment and UK property pages list them as FileThat sends them.

The tax year so far, not three months. "Each quarterly update covers from the start of the current tax year (6 April) to the end of the update period." This is why the second update includes the first quarter's figures, and the fourth holds the whole year. The glossary entry on quarterly updates has the same example.

One update per business. If you are a sole trader who also lets property, that is two income sources and two updates each quarter. GOV.UK says you send them "for each self-employment and property business you have". A quiet quarter is not skipped: "If you have not received any income or incurred any expenses during an update period, you must still send your quarterly update to tell HMRC."

No adjustments yet. GOV.UK says "You do not need to make any accounting or tax adjustments before sending a quarterly update." Capital allowances and accounting adjustments are made at the year end. How FileThat files a cost that is partly private is set out on the self-employment page. For jointly let property you may send income and expenses or income only; if you leave the expenses out, they are reported after the year ends by resending the fourth update.

What a Quarterly Update Is Not

It is not a tax return. Nothing is declared as complete, and nothing is final. The figures can and do change with the next update.

It is not a bill and no payment goes with it. GOV.UK says "Making Tax Digital for Income Tax will not change the way you pay tax or the dates that payments are due." Payments on account stay on 31 January and 31 July, with any balance due on the 31 January after the tax year ends.

After an update you can ask for an estimate of your tax for the year to date, in your software and in your HMRC online account. Treat it as an estimate. GOV.UK warns that it "will be less accurate if you have other income sources that you've not told HMRC about yet, or if your accounting period does not match the tax year". The glossary entry on the tax calculation explains the kinds you can request, and the sole trader tax calculator gives a quick figure without sending anything.

Deadlines and the Calendar Quarter Choice

The four updates are due on 7 August, 7 November, 7 February and 7 May. You can send one any time after its period ends, and up to 10 days before the end if you expect no more transactions.

Standard periods run with the tax year: 6 April to 5 July, then to 5 October, 5 January and 5 April. Calendar periods end on 30 June, 30 September, 31 December and 31 March, and GOV.UK says to use them if your accounting period runs from 1 April to 31 March. The deadlines are the same for both.

The choice has to be made before the first update of the year. GOV.UK says "You cannot change your update periods for the rest of the tax year after you send a quarterly update". The MTD deadlines page shows the dates for either choice, and the 2026-27 tax deadlines guide puts them beside the payment dates.

Correcting a Mistake in an Earlier Quarter

Correct the record, not the update. Because every update covers the year so far, GOV.UK says you "make any corrections to your records if you need to, which will then be included in your next update". There is nothing to withdraw and nothing to re-send for the earlier quarter.

After the fourth update there is no next one to carry the change, so GOV.UK says "You may need to resend your fourth quarterly update if you need to make any changes to your digital records", and to do it before you make any tax adjustments.

What you cannot do is send an update that ends earlier than one HMRC already holds for that business in the same tax year. HMRC refuses it, and FileThat explains the refusal on the help page for the submission end date cannot move backwards. Send the latest quarter again instead, with the corrected records behind it. The guide to correcting a mistake in a quarterly update goes through each case.

What the Tax Return Adds

Adjustments first. Once the fourth update is in, HMRC has the year's totals for each business, and GOV.UK says you may then need to adjust them: removing expenses you cannot claim, claiming capital allowances or the trading allowance, and making accounting adjustments if you do not use the cash basis. Most are made "by updating the annual total for an expense category", not by editing each record.

Then your other income. HMRC adds what it already knows, which GOV.UK lists as including "employment (PAYE) income" and "income from state, private and occupational pensions". You check those and add what HMRC does not have, including "savings interest" and "dividends (including those from your own company)".

Then the declaration. You check the calculation and submit "by declaring that your information is correct and complete to the best of your knowledge". That is the final declaration, and it is what a quarterly update never contains.

It is due by 31 January after the tax year, and can be sent earlier. GOV.UK says "You can make a change to a tax return within 12 months of the submission deadline", and that a refund cannot be claimed through it.

What Each Step Costs in FileThat

FileThat charges per filing, and the rule is short. One credit covers one new quarterly update, or one VAT return that is not a NIL return. Nothing else uses a credit. So a new quarterly update takes one credit for each business you send it for, and resending one to correct it takes none.

The annual submission of adjustments and allowances is free, the tax return is free, and so is amending either. The one year-end charge is for a business you report annually, which sends a single year-end update in place of the four quarterly ones. A business you report annually uses one credit for each quarter of the tax year it traded in when you send its year-end update, so the year costs the same as reporting quarterly, and FileThat tells you how many before you send. Only the first send of that update is charged; resending it to correct it is free.

There is also a ceiling on the year. Once you have paid £50 in a tax year, everything else you file that year is free. Credits are bought in whole units, so the one that takes you past £50 is the last thing you will be charged, and the most we will ever ask you for in a tax year is £55. Agents are not capped.

FileThat is not VAT registered, so there is no VAT to add: the price you see is the price you pay. The pricing page has the price of a credit for your income band, and the cheapest MTD software comparison sets a year with FileThat beside a year of subscription.

Penalties: Which Deadlines Count

For the 2026-27 tax year HMRC gives no penalty points for late quarterly updates. GOV.UK adds two things that matter: "You will need to send your quarterly updates before you are able to submit your tax return using software", and "Penalty points will still apply for late tax returns for this tax year."

From 2027-28 each missed quarterly update deadline earns a point, and at 4 points HMRC charges a £200 penalty. If you are required to join in April 2027, Budget 2026 announced no points for your 2027-28 quarterly updates, though it is not law yet. Late payment has its own penalties, separate from points, and the 2026-27 relief does not cover them.

So for the 2026-27 tax year the deadline that carries points is the tax return, due by 31 January 2028. The MTD penalty calculator shows how points build up once they apply, and the April 2026 guide covers the first year in full.