MTD for ITSA requirement to submit quarterly updates.

Here are the key things for you to know.

1. To be clear: quarterly updates are simply a return requirement. There is no requirement, at this stage, to make quarterly tax payments under MTD for ITSA.
2. Quarterly updates are required on a business-by-business basis – so if you have more than one MTD-relevant business, you’ll need to submit a quarterly update for each. Separate digital records must be maintained for each business. Each self-employment constitutes a separate business. However, with rental income, this will have a single UK property business, and/or a single overseas property business, aggregating relevant rentals. Hence rental income will be covered by two quarterly updates per quarter, at the most.
3. Quarterly updates are cumulative in nature – so the first will cover three months, the second six, and so on; hence, the final quarterly update will include the results for the whole year. This means that errors can be submitted in subsequent quarterly updates, rather than resubmitting earlier updates. The exception, of course, is the final quarterly update – errors identified after that update has been submitted can be rectified either by correcting the underlying digital records and resubmitting the final quarterly update, or by correcting the error directly in the MTD for ITSA software, and then making any necessary adjustments in the underlying records; all submissions to HMRC must tie to the business records.
4. Every three months, our software will add up the totals for each relevant category of income and expenditure, ready for submission. Note that the updates are simply a summary of the digital business records; there is no need to include tax adjustments, or details of non-MTD relevant income.
5. The quarterly update periods, and submission dates, are as follows:

• Late submission of a quarterly update will incur a penalty point for taxpayers who are using MTD for ITSA on a mandatory, rather than voluntary, basis. However, a ‘light touch’ approach means that there will be no penalty points for late submission of the 2026–27 quarterly updates. Unfortunately, the same will not apply to late submission of the 2026–27 MTD tax return; and nor, as far as we know at present, will this light touch apply to taxpayers who join the system in April 2027 or thereafter.