tax-deadlinesUpdated 2026-02-27

What do I need to report in MTD quarterly updates?

Quick Answer

You report category totals of income and expenses — not individual transactions. Self-employment categories include turnover, cost of goods, wages, travel, and professional fees. Property categories include rent received, repairs, insurance, and mortgage interest.

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Detailed Explanation

MTD quarterly updates require you to submit category totals of your income and expenses for each quarter. You do not need to send individual receipts or transaction-level detail to HMRC — your software calculates the totals from your digital records.

Self-employment categories: - Turnover (total sales/income) - Cost of goods sold - Wages and staff costs - Travel and vehicle costs - Repairs and maintenance - Insurance - Professional and legal fees - Office and administrative costs - Advertising and marketing - Interest on business loans - Other allowable expenses

Property income categories: - Rent received - Repairs and maintenance - Insurance - Mortgage interest (allowable portion) - Agent and management fees - Ground rent and service charges - Legal and professional fees - Other property expenses

Quarterly periods and deadlines: - Q1 (6 April – 5 July): Due 7 August - Q2 (6 July – 5 October): Due 7 November - Q3 (6 October – 5 January): Due 7 February - Q4 (6 January – 5 April): Due 7 May

Your MTD-compatible software handles the categorisation and submission. You simply need to keep your records up to date.

Quarterly updates are provisional estimates. You can adjust them in your annual Final Declaration.

Source: HMRC MTD ITSA — Quarterly Update Requirements

Real-World Examples

Freelance Consultant Q1 Submission

You earned £15,000 in consulting fees in Q1 and spent £800 on travel, £200 on software subscriptions, and £150 on professional insurance. Your software calculates these totals and submits them as category summaries to HMRC.

Landlord With Two Properties

In Q2, you received £6,000 in rent across two properties, paid £800 in mortgage interest, £400 in insurance, and £1,200 for a plumbing repair. Your software combines these across properties and submits property income category totals.

Mixed Self-Employment and Property

You have both a self-employed trade and rental income. Your quarterly update includes two sections: one for self-employment categories and one for property categories, each with their own income and expense totals.

Common Mistakes to Avoid

  • Thinking you need to submit every individual receipt or transaction — you submit category totals only.
  • Not keeping digital records throughout the quarter and scrambling to reconstruct them at deadline.
  • Confusing quarterly updates (provisional) with the Final Declaration (definitive) — you can adjust quarterly figures later.
  • Forgetting to include all income sources in the correct category — check your software's categorisation is accurate.

Do I submit individual receipts to HMRC?

No. You submit category totals. However, you must keep your underlying digital records (receipts, invoices, bank statements) in case HMRC requests them during an enquiry.

What if I do not have exact figures at the deadline?

Quarterly updates are provisional estimates. Submit your best figures by the deadline and correct them in subsequent quarters or in the Final Declaration.

Does my software categorise expenses automatically?

Most MTD-compatible software offers automatic categorisation based on transaction descriptions. You should review and correct these to ensure accuracy.

What if I have no income or expenses in a quarter?

You must still submit a nil return for that quarter. Missing the submission deadline — even for a nil return — earns a penalty point.

Practical Tips

  • Update your records weekly or fortnightly rather than leaving everything to the quarterly deadline.
  • Use software with bank feed integration to automatically import transactions and reduce manual data entry.
  • Review your software's automatic categorisation each month to catch errors early.
  • Keep a simple folder system (physical or digital) for receipts, organised by quarter, so they are easy to reference.

Related Questions

What is Making Tax Digital (MTD)?

Making Tax Digital is HMRC's initiative requiring businesses to keep digital records and submit returns using compatible software. VAT is already under MTD; Income Tax follows in April 2026.

What is the MTD Final Declaration?

The Final Declaration replaces the traditional annual Self Assessment tax return under MTD. It confirms your final income and expenses for the tax year and is due by 31 January after the end of each tax year.

What software is compatible with Making Tax Digital?

MTD-compatible software must be on HMRC's approved list. Free options include QuickFile, My Tax Digital, and FreeAgent (via NatWest/Mettle). Paid options include Xero, QuickBooks, Sage, and AccountsOS (14-day free trial, then £20/month + VAT).

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