Your first MTD quarterly update: what to send and when

Femi is fictional, but his situation will be familiar to a lot of people sending their first MTD submission. He runs a small furniture restoration business as a sole trader, and he has just realised his first quarterly update is close. He assumed it would feel like a miniature tax return, with allowances to claim and a bill to work out. It is not that at all.

A quarterly update is a running summary, not a small tax return

A quarterly update tells HMRC your income and expenses for the tax year so far, sorted into categories such as rental income, repairs, professional fees or trade turnover. There is no tax calculation at this stage, no claim for allowances, and no bill generated from sending it. Software adds up what has already gone through your digital records and sends the totals through to HMRC.

Because the updates are cumulative, your first one only ever covers the opening months of the tax year, so there is nothing earlier to reconcile against. Later updates in the same tax year restate the year to date rather than covering only the newest period, which is where a first-timer’s habits start to matter: whatever categories and records you set up now carry through the rest of the year. The main MTD guide covers the wider eligibility and threshold rules if you are still confirming that MTD applies to you at all.

The four periods and when each one is due

These are the standard update periods for the 2026/27 tax year. Whichever of the four is genuinely your first depends on when you became mandated, not on the calendar date you read this.

If your software instead uses calendar update periods, the due dates stay the same, but each period starts and ends on slightly different days. The deadlines calendar lays out both systems side by side for every tax year in the mandate, including the years after 2026/27.

The records that need to sit behind the figures

Software cannot produce a quarterly update from memory or from a shoebox of receipts gathered at year end; it needs digital records kept as you go. Each transaction is entered into compatible software, or into a spreadsheet linked to it through bridging software, close to when it happens rather than reconstructed later. HMRC’s guidance on creating digital records sets out what counts and what the required digital links look like once information moves between one piece of software and another.

If a figure genuinely is not available yet by the deadline, such as a repair invoice that has not arrived, you can enter a reasonable estimate and correct it in the following update. That is a normal part of using a cumulative system, not something to work around by delaying the whole submission.

How the software actually sends it

You do not type figures into a government website for a quarterly update. Your MTD-compatible software pulls the totals from your digital records and submits them directly to HMRC over its own connection, then gives you a confirmation once HMRC has received them. If you run more than one qualifying business, for example a rental property alongside a trade, each business is reported and sent separately, even when the same piece of software handles both.

Worth checking before your first submission: that the software is actually connected to your HMRC business, rather than only holding your records locally. A well-kept spreadsheet does nothing for MTD purposes on its own, until it is linked through compatible bridging software.

If a deadline is missed

Missing a quarterly deadline does not stop you from continuing to file for the rest of the year, and it is worth sending the update as soon as you can rather than waiting for the next one. What actually happens to a late submission, including the current first-year concession, sits in the penalties guide rather than here, since the rules are specific enough to deserve their own explanation.

Questions people ask about their first update

Is the first quarterly update the same as my tax return?

No, it is a much smaller task. It summarises income and expenses by category for the year so far, and the tax return that follows later is where allowances are claimed and the actual bill is worked out.

What if I do not have every figure yet?

You can use a reasonable estimate for anything that has not arrived, such as an outstanding invoice, and correct it in your next update. HMRC expects estimates to happen from time to time in a cumulative system.

Do I still need to send an update for a quarter with no income?

Yes, an update is still expected even where the figures for that period are zero or close to it, because the requirement is to report for each period rather than only when there is activity to declare.

How do I know which of the four periods is genuinely my first one?

It depends on when you became mandated rather than on the calendar date you read this. Everyone’s first MTD tax year is the tax year in which they are brought in, so their first update covers the opening months of that tax year. The deadlines calendar shows the periods for each tax year in the mandate.