Your first quarterly HMRC filing: an MTD ITSA compliance walkthrough
What actually happens when you send your first quarterly HMRC filing under MTD ITSA, from gathering records to submitting through recognised software, to what the 7 August 2026 deadline really means for your compliance.
What a quarterly update actually is
A quarterly update is the recurring piece of MTD ITSA compliance: a summary of one business's income and expenses for a three-month period, sent to HMRC from MTD-compatible software. It is deliberately lighter than a Self Assessment return: your software totals your digital records into HMRC's expense and income categories for the period and transmits those totals. It is not a full tax computation, and it does not ask you to calculate anything by hand.
For the first mandated wave (qualifying income over £50,000), the four periods of the 2026/27 tax year and their deadlines are:
| Quarter | Period covered | Filing deadline |
|---|---|---|
| Q1 | 6 Apr – 5 Jul 2026 | 7 August 2026 |
| Q2 | 6 Jul – 5 Oct 2026 | 7 November 2026 |
| Q3 | 6 Oct 2026 – 5 Jan 2027 | 7 February 2027 |
| Q4 | 6 Jan – 5 Apr 2027 | 7 May 2027 |
Each deadline sits one calendar month and two days after the period it covers ends, which is HMRC's standard rule for every quarterly update, not a one-off for the first quarter. This guide walks through Q1: the same six steps repeat for Q2 through Q4.
Before you start: what you need
A quarterly update should take minutes to actually submit, but only if the groundwork is already done. Three things need to be in place before you open your software to file:
- MTD-compatible software already connected to HMRC for your business. Connecting software to HMRC for the first time can take a few days (HMRC needs to authorise the link), so this isn't something to start the day of the deadline. If you haven't chosen or set this up yet, do that first: see our guide to choosing MTD software.
- Complete digital records for the quarter: every business transaction from the period categorised as income or a specific expense type, whether that's from a connected bank feed, uploaded statements, or manual entry. “Complete” matters more than “perfectly tidy”: a quarter with every transaction present but roughly categorised is in better shape than a quarter with only half the transactions entered.
- Any manual adjustments your software doesn't pull automatically: cash transactions, mileage, or anything not in your bank feed. If you run a bank feed alongside cash income (a market stall, say), the cash side usually needs entering by hand each quarter rather than arriving automatically.
None of this is a one-off setup task you finish and forget; the same three things need to be true again at the start of every quarter, which is exactly why keeping records current as you go beats reconstructing three months of transactions in the days before each deadline.
The walkthrough, step by step
1. Confirm your period and deadline
Check which quarter you're filing and its exact deadline against the table above (or your software's dashboard, which should show it directly). Confirming this first avoids the easy mistake of preparing the wrong three-month window.
2. Close out your digital records for the period
Make sure every transaction from the quarter is in your software and categorised: income by source, expenses by HMRC's categories (for example, office costs, travel, or, for landlords, repairs and letting agent fees). If you connect a bank feed, this is mostly automatic; if you upload statements or enter manually, this is the step that takes the most time, so don't leave it to the day of the deadline.
3. Let your software total the quarter
Your software adds your categorised records together into the quarterly totals HMRC actually receives; you don't manually calculate this yourself. This is the point of digital record-keeping: the totals come from your day-to-day entries, not a separate end-of-quarter exercise.
4. Review before you submit
Skim the totals for anything obviously wrong: a transaction miscategorised, a duplicate, a gap where a week of records is missing. A quarterly update doesn't need the same precision as a final tax computation, but it should be an honest, complete summary of the period, since it feeds your running estimate and, eventually, your Final Declaration.
5. Submit through your software
Quarterly updates are sent to HMRC through your MTD-compatible software's own submission function; there is no separate GOV.UK form to fill in instead. Once submitted, most software will show a confirmation and a reference; keep it, the same way you'd keep confirmation of any filing with HMRC.
6. Note the next deadline and repeat
Filing one quarter doesn't reset the clock to zero; the next period starts the day after this one ended. The steady state is keeping records current through the quarter so each filing is a five-minute review, not a fresh three-month reconstruction every time.
The pattern repeats three more times in the 2026/27 tax year (Q2 due 7 November 2026, Q3 due 7 February 2027, Q4 due 7 May 2027), then closes with your Final Declaration by 31 January 2028. Each quarter should get easier than the last, since the software already knows your categories and your bank connection is already live; the first one is the only one starting from nothing.
If you miss the deadline
For the 2026/27 tax year specifically, HMRC has confirmed it will not apply late-submission penalty points for a missed quarterly update deadline, the so-called soft landing. Two things that doesn't cover: the obligation to file still exists (a missed update doesn't go away, it's just late), and the soft landing does not extend to your Final Declaration or to late- payment penalties on tax actually owed. From the tax year after, the standard points-based system applies: each missed deadline earns a point, and reaching four points triggers a £200 penalty, with a further £200 for each subsequent miss. Full detail is in HMRC's own penalties for Making Tax Digital for Income Tax guidance, and background on what a quarterly update covers is in HMRC's quarterly updates explainer.
Common first-quarter mistakes
- Leaving software setup to deadline week. Choosing software, connecting a bank feed, and categorising a full quarter's backlog of transactions all take longer than the five-minute submission itself; start well before 7 August, not on it.
- Assuming a plain spreadsheet is enough. A spreadsheet can still work, but only through bridging software that connects it to HMRC: emailing a spreadsheet, or keeping one with no software link at all, doesn't meet the digital-records rule.
- Treating the in-year estimate as the final tax bill. The running total your software shows after each quarter is an estimate based on what's been filed so far, not a finished calculation; that only happens at the Final Declaration.
- Forgetting a second income source. If you're a sole trader and a landlord, both businesses need their own quarterly update for the same period; filing one and assuming it covers everything is an easy gap to miss.
Questions people ask
It contributes to an estimate, not a bill. Once you've sent a quarterly update, your software and HMRC's systems can show you a running estimate of tax due for the year so far, but your actual liability is only finalised at your Final Declaration, after all four quarters and any non-business income (like savings interest or employment income) are accounted for. Don't treat the in-year estimate as the number you'll owe.
No. Quarterly updates go through MTD-compatible software, not a form on GOV.UK. HMRC's own guidance is explicit that the software must be able to send your quarterly updates on your behalf; there is no separate government portal for typing them in directly, which is exactly why choosing compatible software (see our guide) is a prerequisite, not an afterthought.
Two separate updates, one per business, each quarter. HMRC treats each self-employment or property business as its own source with its own quarterly filing. Your software should handle both from one account, but the totals HMRC receives are kept apart by source, which also means an error in one doesn't require you to resubmit the other.
You need your digital records for the period to be complete and accurate, which in practice means every business transaction categorised, not a receipt physically attached to each one (though keeping evidence is still sound practice for your own records and in case HMRC asks). If your bank feed or bookkeeping has gaps for the quarter, close them before you submit rather than after.
Nothing is due in between beyond the next quarter's update; there's no fifth interim filing. After your fourth quarterly update for the tax year, you complete the Final Declaration by the following 31 January, which is when you report anything the quarterly updates didn't cover (employment income, dividends, capital gains) and make any final adjustments before your tax position for the year is settled.
Digital records themselves can be corrected in your software, and HMRC's guidance describes the service as letting you create, store, and correct digital records, but a quarterly update is a snapshot of those records at the point you sent it. If you find an error afterward, the safest approach is to fix the underlying record in your software and check with your specific software provider (or HMRC) on how a correction to an already-submitted quarter is reflected, since this can vary by product.
Want QuarterClose to handle it?
We keep your digital records and file every quarterly update and your Final Declaration for you, flat £39/mo. No card, no sales call, just your personalised MTD plan by email.