Making Tax Digital quarterly deadlines

The four dates

For anyone using the standard tax year periods, the quarterly update deadlines are fixed and the same for everybody.

The first quarter covers 6 April to 5 July and is due by 7 August. The second covers 6 April to 5 October and is due by 7 November. The third covers 6 April to 5 January and is due by 7 February. The fourth covers the whole year to 5 April and is due by 7 May.

Notice that each period starts on 6 April rather than continuing from where the last one stopped. The updates are cumulative, so each one restates the year to date rather than reporting only the latest three months. That is helpful in practice, because a mistake in quarter one can simply be corrected in quarter two rather than needing a separate amendment.

There is an alternative set of calendar quarters running 1 April to 30 June and so on, which suits businesses whose bookkeeping runs to month ends. The deadlines are exactly the same four dates. You elect for calendar periods in your software, and the choice is worth making at the start rather than switching later.

Who has to join, and when

Entry is based on qualifying income, and the definition matters. Qualifying income is your gross income from self employment and from property, added together, before any expenses are deducted. It is turnover, not profit.

That distinction catches people out badly. A landlord with £55,000 of rent and a £40,000 mortgage interest bill has a modest profit but is well over the threshold. A sole trader turning over £60,000 with £45,000 of costs is in the same position.

From 6 April 2026, anyone whose qualifying income exceeded £50,000 in the 2024/25 tax year is in. From 6 April 2027 the threshold drops to £30,000, tested against 2025/26. From 6 April 2028 it falls again to £20,000, tested against 2026/27.

The test looks backwards at a year already filed, so you can work out today whether you are caught. HMRC also writes to those it believes are affected, but the obligation exists whether or not the letter arrives.

Who is not caught

Employment income does not count towards qualifying income, so somebody earning £80,000 in a job with £15,000 of rental income on the side is under the threshold on the property figure alone.

Dividends, savings interest, pensions and capital gains are all outside the test. Partnerships are not yet in scope, and neither are companies. Trusts, estates and certain other categories are excluded for now.

Exemptions exist for those who are digitally excluded, meaning it is not reasonable or practical for you to use digital tools because of age, disability, location or religious belief. That has to be applied for, it is not automatic, and HMRC assesses each case.

What the quarterly update actually contains

Much less than people fear. A quarterly update is a summary of income and expenses by category for the period, sent from your software to HMRC. It is not a tax return, it is not a calculation, and it does not need to be perfect.

No adjustments are required at the quarterly stage. Capital allowances, private use restrictions, accruals and prepayments are all dealt with at the end of the year, not four times over. That is a deliberate design choice and it makes the quarterly obligation far lighter than it first appears.

You also do not need to submit anything if the business had no transactions in a quarter, other than a nil update, and you can send an update any time from the end of the period to the deadline rather than waiting.

The final declaration still lands on 31 January

Quarterly updates do not replace your tax return. After the fourth update you make a final declaration, which pulls everything together, adds any income outside the scope of the quarterly updates such as employment or dividends, applies all the year end adjustments and reliefs, and produces the actual tax figure.

That final declaration is due by 31 January, exactly as your return was before. So a sole trader who used to make one submission a year now makes five.

Payment dates are unchanged

This is the most common misunderstanding and it is worth being clear about. Quarterly reporting does not mean quarterly tax payments. The updates carry no tax charge at all.

You still pay on 31 January and 31 July, and payments on account still work exactly as they always have, based on the previous year's bill. Nothing about the money has changed, only the reporting.

If anything, the change helps with budgeting. Because you have a running picture of the year as it goes, you can see the eventual bill forming rather than discovering it in January, and a claim to reduce payments on account becomes much easier to justify where income has genuinely fallen.

The penalties

Late submission uses a points system rather than an immediate fine. Each missed deadline earns one point, and at 4 points a £200 penalty applies, with a further £200 for every missed deadline after that.

There is an important concession for the first year. There are no penalties at all for missing a quarterly update deadline during the 2026/27 tax year, although the updates still have to be submitted before you can make your final declaration. That is a soft landing, not a permanent exemption, and it does not extend to the final declaration itself.

Late payment penalties are separate and are not points based. Nothing is charged for the first 15 days. Then 3% of the amount outstanding is charged at day 15, a further 3% at day 30, and from day 31 a daily penalty accrues at an annual rate of 10%. In your first year in the regime you get 30 days rather than 15 before the first charge. From the 2027/28 tax year the first two charges rise from 3% to 4% each.

What you actually need to do

Three things, and the first is the one that takes time. You need compatible software. Paper records, a shoebox of receipts and a hand written cash book are no longer sufficient, and neither is a spreadsheet on its own unless it is linked to bridging software.

Second, the records themselves must be digital and must be created reasonably close to the transaction, rather than reconstructed months later from bank statements. In practice bank feeds do most of this automatically once set up.

Third, you need to authorise the software to talk to HMRC, and if you use an accountant they need authorising too. That is a short process but it cannot be done at the last minute.

The honest assessment

For a business already using accounting software with a bank feed, this is a genuinely minor change. The data is already digital, the quarterly update is close to a button press, and the year end work is easier because the records are current rather than being assembled from scratch every January.

For a business still working from paper or a shoebox, it is a real change in habit, and the discomfort is in the bookkeeping rather than the filing. The good news is that the discipline of keeping records current usually pays for itself. Businesses that know their numbers monthly make better decisions than businesses that find out fourteen months later.

The mistake is to leave it until the first deadline is close. Getting the software running and the bank feed connected takes an afternoon when done calmly and a fortnight of stress when done in a panic.

A worked year for a landlord

Rachel owns four rental flats producing £62,000 of rent a year. Her mortgage interest, letting agent fees, insurance and repairs come to £38,000, leaving a profit of around £24,000. Because qualifying income is measured on the gross rent rather than the profit, she is comfortably over the £50,000 threshold and joined on 6 April 2026.

Her year now looks like this. In July she reviews the quarter to 5 July and her software sends the update by 7 August. In October she does the same for the period to 5 October, filed by 7 November. In January the update to 5 January goes by 7 February, and in April the final quarter to 5 April goes by 7 May.

Then, at some point before 31 January 2028, she makes her final declaration for 2026/27. That is where the mortgage interest restriction is applied, any replacement of domestic items relief is claimed, and her employment income and dividends are added. The tax is calculated once, at that point, and paid on 31 January 2028 with a payment on account following on 31 July.

The total extra work compared with her old routine is four short submissions, each taking a few minutes once the bank feed is running. What genuinely changed for her was the bookkeeping, which now happens quarterly instead of in a single miserable weekend each January.

More than one business

If you have two trades, or a trade and rental property, each needs its own set of quarterly updates. Two businesses means eight updates a year plus the final declaration, not four.

The threshold is tested on the combined figure though, so £30,000 of trading turnover and £25,000 of rent puts you over £50,000 even though neither on its own would. Property income is split further between United Kingdom property and overseas property, which counts as separate businesses for reporting.

Joining voluntarily

You can join before you are required to, and there are reasons to consider it. Testing the software while penalties do not yet apply to you removes most of the risk from the transition, and it means the first mandatory year is routine rather than new.

The trade off is that you take on the quarterly obligation early and you move onto the newer late payment penalty regime sooner. For a business already using accounting software properly, joining early is usually low risk. For one still on paper, it makes more sense to fix the bookkeeping first and join when required.

Frequently asked questions