MTD Quarterly Updates Explained Simply
Quick Answer
MTD quarterly updates are simply summary totals of your income and expenses sent to HMRC every three months; they are not full tax returns and do not require year-end adjustments.
If the thought of sending four tax returns a year makes you anxious, you aren't alone. HMRC research shows that 39% of people thought quarterly submissions would be difficult.
The good news? A quarterly update is not a tax return.
What an MTD quarterly update actually is
Under Making Tax Digital (MTD), a quarterly update is just a summary of your income and expenses for a three-month period. You don't need to make complex accounting adjustments, claim allowances, or worry about exact precision.
All of that still happens at the end of the tax year, just like it does now.
You cannot submit your quarterly updates on the HMRC website. You must use compatible MTD software to send the totals directly from your digital records.
Does it mean more work?
It shouldn't. If you already keep track of your income and expenses during the year, sending a quarterly update is just a matter of pressing a button in your software.
For example, with software like Abridge, sending your MTD quarterly update takes about 30 seconds. You just upload your spreadsheet, and we handle the rest.
Cumulative reporting explained
You might wonder what happens if you miss an expense in quarter one. Do you have to resubmit it?
Usually, the updates work on a cumulative basis. This means your quarter two update can include anything you missed in quarter one. You don't need to panic about tiny errors during the year. The final corrections are made during your end-of-year process.
Ready to comply with MTD?
Abridge makes it easy to submit your spreadsheet to HMRC.
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Ready to comply with MTD?
Abridge makes it easy to submit your spreadsheet to HMRC.