An MTD quarterly update contains summary totals only: the income and the expenses for each self-employment or property business you have, added up by your software from your digital records. It does not include individual transactions, tax adjustments or a final tax bill. With the next update due by 7 November 2026, this guide sets out which figures go in, which wait until the year end, and how to check an update before you press send.
Key takeaways
- A quarterly update is a summary of income and expenses, not a tax return.
- Each update is cumulative, covering the start of the tax year to the end of the latest period.
- HMRC receives totals by category, never your individual receipts or invoices.
- No accounting or tax adjustments are needed until after the fourth update.
- You send a separate update for each self-employment and property business.
What is an MTD quarterly update?
Under Making Tax Digital for Income Tax, you keep digital records of your business income and expenses and send HMRC a summary every three months. That summary is the quarterly update. Your compatible software generates it for you to check, and HMRC describes the process on GOV.UK under send quarterly updates.
MTD for Income Tax applies from 6 April 2026 if your qualifying income was over £50,000 in 2024/25, from 6 April 2027 if it was over £30,000 in 2025/26, and from 6 April 2028 if it was over £20,000 in 2026/27. Our guide to MTD qualifying income explains what counts towards those figures.
The figures inside an update
Every update has two sides: income and expenses. MTD uses the same income and expense categories as Self Assessment, so the headings will look familiar if you have completed the self-employment or property pages of a tax return before.
For a self-employment business, the expense headings broadly cover:
- cost of goods bought for resale or used in the work
- car, van and travel costs
- wages and other staff costs
- premises costs such as rent, rates, power and insurance
- repairs and maintenance
- phone, stationery and other office costs
- advertising
- interest and other finance charges
- accountancy, legal and other professional fees
- other business expenses
A property business has its own shorter list, including rent, rates and insurance, repairs and maintenance, and professional fees. Your software maps each transaction to a heading when you record it, which is why getting the category right at the point of entry saves time later. If you are unsure whether a cost is claimable at all, see our list of sole trader allowable expenses.
Category totals or a single expenses figure?
The standard position is a total for each category you have used. Whether a smaller business may send one consolidated expenses figure instead of a breakdown, and at what turnover, is a matter for HMRC's quarterly update direction. We have not quoted a threshold here because the main guidance page does not state one, and software products differ in what they offer. Check the current position in the Making Tax Digital for Income Tax guidance on GOV.UK, or ask us. Either way, your underlying records still need a category for every expense.
What goes in now and what waits for the year end
| In each quarterly update | Dealt with after the fourth update |
|---|---|
| Business income recorded for the tax year to date | Accounting adjustments, such as stock or amounts owed at the year end |
| Expense totals by category for the tax year to date | Tax adjustments, such as private use of a vehicle or phone |
| One update per self-employment or property business | Capital allowances and other reliefs |
| An update even when nothing happened in the period | Other income such as employment, savings interest and dividends |
| Summary totals only | The tax return that confirms your final figures |
The year end stage is covered in our guide to the MTD final declaration.
Why the figures are cumulative
Each update runs from the start of the tax year to the end of the latest period. On standard update periods, the update due by 7 November covers 6 April to 5 October, not only July to October. The four deadlines are 7 August, 7 November, 7 February and 7 May, and our quarterly update deadlines guide lists the periods behind each one.
The practical benefit is that corrections are simple. If you fix a record from an earlier quarter, the next update carries the corrected total and you do not resend the old one.
Step by step: checking an update before you send it
- Bring your records up to date. Enter or import every sale and expense up to the end of the period.
- Reconcile to the bank. Make sure the income in your software agrees with what actually reached your account.
- Clear uncategorised items. Anything left unallocated will either be missed or land under the wrong heading.
- Remove personal spending. Private costs paid from the business account should not be recorded as business expenses.
- Review the totals by category. Compare them with the previous update. A heading that has barely moved, or has jumped, deserves a second look.
- Repeat for each business. A sole trade and a rental property need separate updates.
- Send and save the confirmation. Keep the submission receipt your software gives you.
Worked example (illustrative)
"Dalia", an illustrative example, is a self-employed electrician who joined MTD in April 2026. Her first update, for 6 April to 5 July 2026, showed income of £16,000 and expenses of £5,000.
In October she prepares her second update. Between 6 July and 5 October she earned another £17,000 and spent £6,000. She also finds a £400 receipt for cable bought in June that she never entered, and adds it to her records under cost of goods.
Her second update therefore shows income of £33,000 and expenses of £11,400 for 6 April to 5 October 2026, split across cost of goods, van and travel, office costs and professional fees. The missed £400 is picked up automatically, and she does not resend the first update. Her van cost her £9,000 in May, but no capital allowance appears yet. That is claimed at the year end.
The person and figures are invented for illustration and are not a real client.
Common mistakes
- Sending three months of figures. The update is year to date, and software handles this if the records are complete.
- Trying to make tax adjustments early. Leave capital allowances and private use adjustments for the year end.
- Combining businesses. Each self-employment and property business has its own update.
- Using "other expenses" as a dumping ground. Large totals under a vague heading invite questions.
- Skipping a quiet quarter. An update is still required when there is nothing new to report.
- Treating the estimate as a bill. The tax estimate shown after an update is a guide and will change once year end adjustments are made.
How we can help
We set up compatible software, keep your digital records in the right categories, review each update before it goes and handle the year end adjustments. MTD compliance starts from £49 per month on a fixed fee. See our MTD compliance service, view our pricing, or contact us before the 7 November 2026 deadline.
Frequently Asked Questions
What figures are in an MTD quarterly update?
An MTD quarterly update contains summary totals of income and expenses for one self-employment or property business. Your compatible software adds up the digital records you have kept and produces a total for each income and expense category you have used. It covers the tax year to date and contains no tax adjustments, allowances or reliefs.
Does HMRC see my individual transactions?
No. HMRC receives the category totals only, not the individual sales, receipts or invoices behind them. The detailed digital records stay in your software or spreadsheet. You must still keep them, because HMRC can ask to see your records if it opens a check, and the totals you send must be drawn from those records.
Do I need to include capital allowances in a quarterly update?
No. A quarterly update needs no accounting or tax adjustments, so capital allowances, private use adjustments and similar items are left out. They are dealt with after the fourth update, when you finalise the figures for each business before submitting your tax return. Record the purchase of equipment in your digital records as usual so nothing is lost.
Do I send an update if I earned nothing in the quarter?
Yes. If you received no income and had no expenses in the latest period, you must still send the quarterly update so HMRC knows. Because each update is cumulative, it will simply repeat the totals from the start of the tax year. Sending it keeps your record of submissions complete and lets you file the tax return later.
What happens if I put an expense in the wrong category?
You correct the digital record and the fix flows into your next update. Each quarterly update covers the period from the start of the tax year, so the corrected totals replace the earlier ones without you resending old updates. If the error is found after the fourth update, resend that update before making any year end tax adjustments.
Related reading
How Berber Accounts & Tax helps
We are a London-based, specialist gig-economy and MTD accounting practice working with fixed monthly fees. If you would like this handled for you rather than doing it yourself, we can help.
Schedule a consultation →Written by the Berber Accounts & Tax team, 124 City Road, London EC1V 2NX, United Kingdom.
Last reviewed: 10 October 2026.
This article is general information, not personal tax advice. Speak to a qualified accountant about your own circumstances before acting on it.