Making quarterly returns for MTD for ITSA - Go Figure Financial | Bookkeeping Services Manchester

olivia26264
3 hours ago
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Making Tax Digital for Income Tax Self-Assessment (MTD for ITSA) is now a reality for individuals who had combined trading and property income of at least £50,000 in 2024/25. They will now need to keep their records digitally and file their first quarterly return by 7 August 2026.

The quarterly updates are sent to HMRC digitally using software that is compatible with MTD for ITSA. Quarterly updates must be submitted for each source of self-employment income and each source of property income.

The quarterly updates will contain:

· the digital records for self-employment and property income and expenses for the previous three months; and

· the digital records which have already been created since 6 April 2026 and any corrections to those records.

After sending each update, the individual will be able to see an estimate of their tax bill.

Details of the categories under which the information provided in the quarterly update should be recorded can be found online at: www.gov.uk/government/publications/update-notice-for-making-tax-digital-for-income-tax/making-tax-digital-for-income-tax-update-notice.

If the individual has other income, such as income from employment or a pension or investment income, they do not need to report this in the quarterly update. Instead, other income is reported in the final declaration. This is the point at which reliefs are claimed too.

Update periods

Individuals have a choice whether to prepare quarterly updates using the standard periods, which correspond with tax months, or the calendar update periods.

The following table shows the periods and quarterly update deadlines.

Standard update periods		Calendar update periods
6 April to 5 July	7 August	1 April to 30 June	7 August
6 April to 5 October	7 November	1 April to 30 September	7 November
6 April to 5 January	7 February	1 April to 31 December	7 February
6 April to 5 April	7 May	1 April to 31 March	7 May

Taxpayers can choose to send updates more frequently if they wish, such as monthly.

Missed deadlines

Under the penalty regime that applies under MTD, where a deadline is missed, a penalty point is issued. Once the penalties reach the penalty threshold, which for quarterly return is four points, a £200 penalty is levied.

However, HMRC have stated that for taxpayers who are mandated for MTD for ITSA from 6 April 2026, they will not issue penalty points for late quarterly updates for the first 12 months.