MTD Quarterly Updates Explained in Under 3 Minutes: What SMEs Need to Know

By Jessica

If you’re a small business owner, a freelancer, or a landlord, you’ve probably heard the term "MTD" whispered in hushed, slightly panicked tones. Making Tax Digital (MTD) is HMRC’s giant plan to move the UK tax system into the 21st century.

But here’s the thing: while the big changes for Income Tax (ITSA) aren’t fully landing until April 2026, the time to understand what’s happening is right now. Specifically, you need to know about "Quarterly Updates."

Don't worry: I'm not going to bore you with tax legislation. Let’s break down exactly what this means for your business in under three minutes of reading time (or a slightly longer deep-dive if you want the juicy details).

What is MTD for ITSA 2026?

In the "old days" (which is basically right now), you’d gather all your receipts, panic around January 20th, and send one big Self Assessment to HMRC.

From April 2026, that changes. For those in scope, the annual "one-and-done" tax return is being replaced by a digital system where you keep records throughout the year and send four quarterly updates to HMRC.

Who is in the "£50k Club"?

The first wave of MTD for ITSA starts on 6 April 2026. It applies to you if:

• You are self-employed or a landlord (or both!).

• Your total qualifying income (turnover) is over £50,000.

If you earn between £30,000 and £50,000, your turn comes in April 2027. If you’re under £30,000, HMRC is still having a think about when to bring you in, so you can breathe a sigh of relief for now.

The 4 Quarters: Your New Calendar

Instead of one deadline, you’ll have four small ones. These updates are meant to give you: and HMRC: a real-time view of how much tax you actually owe, so you don't get a nasty surprise at the end of the year.

Here is the standard schedule you’ll likely follow:

1. Quarter 1 (April 6 – July 5): Update due by August 5.

2. Quarter 2 (July 6 – Oct 5): Update due by November 5.

3. Quarter 3 (Oct 6 – Jan 5): Update due by February 5.

4. Quarter 4 (Jan 6 – April 5): Update due by May 5.

Note: You still have to do a "Final Declaration" by January 31st (the following year) to tie everything together, but the quarterly updates do the heavy lifting.

What is actually in a "Quarterly Update"?

This is the part that scares people, but it’s actually simpler than a full tax return. A quarterly update is just a summary of your income and expenses.

You don't need to send every single receipt to HMRC. You just need to use MTD-compatible software to push a button that says: "In the last three months, I made £X and spent £Y on allowable expenses."

The key word here is Digital Records. You can’t use a shoebox of receipts or a handwritten ledger anymore. You’ll need a bookkeeping system that talks directly to HMRC. This is why getting your bookkeeping services sorted now is a total game-changer.

The "Soft Landing": Some Good News

HMRC knows this is a big shift. According to recent insights from AccountingWEB, HMRC has confirmed a "soft-landing" for the first year (2026-27).

This means if you're a bit late with your quarterly updates in that first year, you won't immediately get hit with late-submission penalty points. They want to give you time to get used to the software and the rhythm. However, don't use this as an excuse to ignore it: 7 mistakes you might be making with your tax can still lead to bigger headaches if you're not careful.

Why 2025 is the "Real" Deadline

Even though the law kicks in in 2026, experts at AccountingWEB recommend treating 2025 as your deadline. Why? Because you don't want to be learning new software on the very day you're supposed to be filing your first MTD update.

By starting in 2025, you can:

• Test your tax preparation workflows.

• Make sure your bank feeds are working correctly.

• Get used to snapping photos of receipts on your phone.

How to Get Ready Without the Stress

Transitioning to quarterly updates doesn't have to be a nightmare. In fact, most business owners who switch to digital accounting end up loving it because they actually know if they’re making a profit before the year ends.

1. Check your income: If you're over £50k, 2026 is your year.

2. Go Digital: If you're still using spreadsheets, it's time to move. Check out our guide on finding the perfect accountant in London (or anywhere in the UK!) to help you pick the right software.

3. Get a Pro: A good accountant will handle the MTD "handshake" for you, ensuring your quarterly updates are filed correctly so you can focus on running your business.

Need a hand?

MTD is a big change, but you don't have to navigate it alone. At Accountant Search, we specialise in matching SMEs with the right experts who live and breathe MTD compliance. Whether you need help with the initial setup or want someone to take the whole quarterly update burden off your plate, we've got you.

Don't wait for 2026 to arrive. Get ahead of the curve and find an accountant who makes MTD feel like a walk in the park.