First MTD quarterly update checklist

Four weeks before the quarter ends

• Confirm you are signed up for MTD for Income Tax, yourself or through your agent.
• Choose software from HMRC's compatible list and authorise it to connect to your HMRC account.
• Connect bank feeds for every business bank account and card.
• Decide on standard quarters (ending 5 July, 5 October, 5 January, 5 April) or calendar quarters (ending 30 June, 30 September, 31 December, 31 March). The deadlines are the same either way.
• Agree who records, who reviews and who submits, especially if you use a bookkeeper or accountant.

During the quarter

• Record every income and expense with its amount, date and category. Below the VAT registration threshold you can simply mark each item as income or expense.
• Snap or upload receipts when you spend, not at the end of the quarter.
• Keep business and personal spending apart. If they mix, tag personal items so they stay out of the totals.
• For property income, record gross rent and each agent deduction separately, not just the net payment.
• Note anything unusual, such as a large one-off sale or a refund, so you can explain it at review.

In the week after the quarter ends

• Reconcile each bank account and card to its statement for the quarter.
• Clear uncategorised transactions and duplicates.
• Check income against invoices or rent schedules.
• Compare the totals with the same period last year, or with your expectations, and look into anything far out.
• Check records only moved between programs by digital link (import, export or linked cells). Retyping or copy and paste between programs is not allowed once records are in.

Submitting the update

• Open the quarterly update in your software and check the period and the totals.
• Submit any time from the day after the quarter ends up to the deadline. You can send up to 10 days early if you expect no more transactions.
• Save the confirmation with the quarter's records.
• If you find a mistake later, correct your records. The next update covers the year to date, so it carries the fix.

Deadlines for standard quarters:

Common first-quarter mistakes

• Waiting until August to record April's transactions. Most errors come from reconstructing a quarter in one sitting.
• Recording net agent payments instead of gross rent and fees.
• Forgetting a second bank account or a card used occasionally for the business.
• Assuming no income means no update. You must send an update even for a quarter with nothing in it.

Late quarterly updates do not earn penalty points in the 2026 to 2027 tax year, but treat this first year as practice for the points system. From 2027 to 2028 each late update earns a point, and 4 points means a £200 penalty.

Frequently asked questions

Want someone to prepare and check your quarterly updates? Book a free 30-minute call with Larissa.