Submitting Your Quarterly Update to HMRC
If you are a sole trader or landlord with gross income over £50,000, Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) requires you to submit quarterly updates to HMRC using compatible software. This guide walks you through the entire process — from gathering your records to clicking submit.
If you are not sure whether MTD applies to you, start with our guide on what Making Tax Digital is before reading this article.
Before You Start: What You Need
Before you can submit your first quarterly update, you need the following in place:
1. An HMRC Government Gateway Account
You need a Government Gateway user ID and password. If you already file Self Assessment online, you likely have one. If not, you can create one at gov.uk.
2. MTD Registration
You must sign up for MTD for Income Tax through your Government Gateway account. This is a separate registration from Self Assessment — even if you are already registered for Self Assessment, you need to explicitly opt into MTD for ITSA.
To sign up: - Go to your HMRC online account - Look for the Making Tax Digital section - Follow the sign-up process for Income Tax
HMRC may take up to 72 hours to process your sign-up. Do not leave this until the day before your first deadline.
3. Compatible Software
You must use MTD-compatible software to submit. You cannot submit quarterly updates through the HMRC website. The software connects to HMRC's API and sends your data securely.
Options range from full accounting suites to focused submission tools. If you are looking for something simple and affordable, ClearMTD handles quarterly submissions without the complexity of a full accounting package. For a full comparison of your options, see our guide to the cheapest MTD software in the UK.
4. Your Digital Records
You need a digital record of your income and expenses for the quarter. This means:
- Income: All amounts received from your self-employment or property letting during the quarter
- Expenses: All allowable business expenses incurred during the quarter, categorised appropriately
The records must be digital — paper records alone are not sufficient under MTD. You can use your MTD software to record transactions directly, or maintain a spreadsheet that is digitally linked to your submission software.
Understanding the Quarterly Deadlines
The tax year runs from 6 April to 5 April the following year. It is divided into four standard quarters:
| Quarter | Period | 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 |
You have approximately one month after the end of each quarter to submit your update. Missing deadlines results in late submission penalty points under HMRC's new points-based system. Accumulate 4 points and each subsequent late submission costs you £200.
Set calendar reminders for these dates. Better yet, submit early — there is no requirement to wait until the end of the quarter.
Step-by-Step: Submitting a Quarterly Update
Here is the process from start to finish. The exact screens will vary depending on your software, but the steps are consistent across all MTD-compatible tools.
Step 1: Log Into Your MTD Software
Open your MTD-compatible software and log in. If this is your first time, you will need to create an account and go through the initial setup.
With ClearMTD, this takes about two minutes — enter your email, set a password, and you are in.
Step 2: Connect to HMRC (First Time Only)
The first time you use your software, you need to authorise it to communicate with HMRC on your behalf. This uses the OAuth protocol — the same secure method used by online banking.
The process works like this: 1. Click the "Connect to HMRC" button in your software 2. You are redirected to the HMRC website 3. Log in with your Government Gateway credentials 4. Grant permission for the software to submit on your behalf 5. You are redirected back to your software
This authorisation typically lasts for 18 months before you need to re-authorise. You do not need to do this every quarter — just the first time and whenever the token expires.
Step 3: Select the Quarter
Choose which quarter you are submitting for. Your software should show you the available quarters and indicate which ones have already been submitted.
Make sure you are selecting the correct period. If you are submitting for Q1 of the 2026/27 tax year, the period is 6 April 2026 to 5 July 2026.
Step 4: Enter Your Income
Enter the total income received during the quarter. Depending on your income source, this may be broken down into categories:
For self-employment: - Turnover (sales/revenue from your trade) - Other business income (e.g., interest, grants)
For property income: - Rental income received - Other property income (e.g., insurance payouts for property damage)
Enter the gross amounts — do not deduct expenses at this stage. Your software handles the calculations.
Step 5: Enter Your Expenses
Enter your allowable business expenses for the quarter. Common categories include:
- Cost of goods sold — materials, stock, direct costs
- Office and premises costs — rent, utilities, insurance
- Travel expenses — fuel, public transport, parking (business journeys only)
- Professional fees — accountant, solicitor, professional subscriptions
- Advertising and marketing — website costs, advertising spend
- Telephone and internet — business proportion of your phone and broadband
- Equipment and tools — items bought for business use
- Other expenses — anything else that is wholly and exclusively for business
You do not need to itemise every individual transaction in the quarterly update. The update contains category totals. However, your underlying digital records must contain the individual transactions in case HMRC ever asks to see them.
Step 6: Review Your Figures
Before submitting, review the summary of your income and expenses. Check that:
- The income figure matches your records (bank statements, invoices paid)
- The expense totals look reasonable for the quarter
- You have not missed any significant income or expenses
- The correct quarter is selected
Quarterly updates are not final — you can amend figures later if you discover an error. However, it is better to get them right the first time to avoid complications at year-end.
Step 7: Submit to HMRC
Click the submit button. Your software sends the data to HMRC through their API. You should receive a confirmation — most software displays a success message along with a reference number.
Keep this confirmation for your records. With ClearMTD, your submission history is stored in your dashboard, so you can always go back and check what was submitted and when.
The entire process — from logging in to receiving confirmation — typically takes 10 to 15 minutes if your records are up to date. With practice, it gets faster.
After Submitting: What Happens Next
HMRC Receives Your Data
Your quarterly update appears in HMRC's systems. At this stage, no tax calculation is made. HMRC simply records the income and expense figures for the quarter.
You Can Amend If Needed
If you realise you made an error, you can submit an amended update for the same quarter. The new submission replaces the previous one. There is no penalty for correcting a quarterly update as long as you do so before the Final Declaration.
Repeat Each Quarter
The process repeats every three months. After four quarterly updates, you then complete your End of Period Statement and Final Declaration — but those are year-end tasks.
Common Mistakes to Avoid
1. Waiting Until the Last Minute
Quarterly deadlines are fixed and HMRC's penalty points system has no leniency for procrastination. Submit early in the month-long window to avoid last-minute issues — whether that is software problems, forgotten passwords, or unexpected business trips.
2. Mixing Personal and Business Expenses
Only claim expenses that are wholly and exclusively for business purposes. If you use your mobile phone for both personal and business calls, claim only the business proportion. HMRC can enquire into your expenses, and claiming personal costs is a common trigger.
3. Forgetting to Keep Underlying Records
Submitting quarterly totals is not enough. You must maintain detailed digital records of individual transactions. If HMRC asks to see your records, "I submitted the totals" is not a sufficient response. Keep digital copies of invoices, receipts, and bank statements.
4. Not Reconciling with Your Bank
Before submitting, cross-check your income figure with your business bank account. Money received into your account should broadly match the income you are declaring. Discrepancies could mean you have missed some income or included a personal deposit by mistake.
5. Using the Wrong Quarter Dates
The quarters run from the 6th to the 5th — not from the 1st to the end of the month. A payment received on 6 July falls in Q2, not Q1. Double-check the dates if you are near a quarter boundary.
Tips for Making Quarterly Submissions Easier
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Record transactions as they happen. Spending five minutes a week logging income and expenses is much easier than reconstructing three months of transactions at deadline time.
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Use a dedicated business bank account. Separating business and personal finances makes it much simpler to identify business income and expenses.
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Set up calendar reminders. Four dates a year. Add them to your calendar with a one-week warning so you have time to prepare.
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Choose simple software. If your affairs are straightforward, you do not need complex accounting tools. A purpose-built MTD submission tool like ClearMTD keeps the process fast and focused.
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Do not over-categorise. The quarterly update only needs category totals. Spend your energy on accuracy, not on deciding whether a £5 purchase is "office supplies" or "equipment."
Frequently Asked Questions
How long does a quarterly update take to submit?
With up-to-date records and the right software, 10 to 15 minutes. The actual submission to HMRC takes seconds — the time is spent entering or reviewing your income and expense figures. If you record transactions throughout the quarter, submission is essentially just a review and a click.
Can I submit a quarterly update early?
Yes. You can submit at any point during the quarter or within the deadline window. There is no requirement to wait until the quarter ends, though your figures will only reflect transactions up to the point of submission. Some people prefer to submit shortly after the quarter ends to capture all transactions.
What if I have no income or expenses in a quarter?
You still need to submit a quarterly update — even if the figures are zero. A nil return confirms to HMRC that you had no activity. Failing to submit a nil return still counts as a missed deadline and will attract a penalty point.
Do I need to submit receipts with my quarterly update?
No. The quarterly update contains only summary totals — category-level income and expense figures. You do not upload receipts or invoices. However, you must keep those records digitally in case HMRC requests them. The standard record-keeping requirement is to retain records for at least 5 years after the 31 January submission deadline for that tax year.
What if I have both self-employment and property income?
You submit separate updates for each income source. If you are a sole trader who also lets a property, you would submit one quarterly update for your self-employment income and another for your property income. Most MTD software handles both within the same interface.
Summary
Submitting a quarterly update to HMRC under MTD is a straightforward process once you have the right setup in place. The key steps are: keep digital records throughout the quarter, log into your software, enter your income and expenses, review, and submit. The whole process should take no more than 15 minutes.
The most important thing is to establish a routine. Treat it like any other business task — a quarterly checkpoint that takes minutes, not hours. With the right software, MTD compliance becomes a minor administrative task rather than a major burden.
Start your free trial with ClearMTD and see how simple quarterly submissions can be.