Making Tax Digital splits your year into two different kinds of reporting, and they ask for very different things. Confusing them is the single most common source of anxiety about MTD, so it is worth being precise.
Quarterly updates: rough totals, four times a year
A quarterly update is a summary of your business income and expenses, broken down by category. It is deliberately unfinished:
- No allowances or reliefs. Capital allowances, the trading allowance, loss relief — none of it goes in a quarterly update.
- No accounting adjustments. No accruals, no prepayments, no stock adjustments, no private-use restrictions.
- No tax calculation you have to act on. HMRC may show you an estimate. It is an estimate.
- No other income. Employment, pensions, dividends and bank interest are not in scope.
It is a running total of what went through the business, categorised. That is all.
The figures are cumulative
This surprises people. Each quarterly update carries the totals from 6 April to the end of that quarter — not just that quarter on its own. Your third update covers roughly nine months, not three.
The practical benefit is that a mistake fixes itself. If you miscategorised something in Q1, you correct it in your records and the next cumulative update carries the corrected figure. There is no separate amendment dance for an ordinary error.
The quarters and their deadlines
| Quarter | Period covered | Update due |
|---|---|---|
| Q1 | 6 April – 5 July | 7 August |
| Q2 | 6 July – 5 October | 7 November |
| Q3 | 6 October – 5 January | 7 February |
| Q4 | 6 January – 5 April | 7 May |
Source: GOV.UK: send quarterly updates.
You get five weeks after each quarter ends. You can also elect for calendar quarters — 1 April to 30 June, and so on — which lines up more naturally with most bookkeeping. The deadlines stay on the same dates.
The Final Declaration: the real one
After the tax year ends, the Final Declaration is where everything comes together. This is the part that replaces your Self Assessment return, and it is where the actual tax figure is settled.
Into it goes:
- Your business figures for the year, now adjusted properly — allowances, reliefs, accounting adjustments, private-use splits.
- Everything else — employment income, pensions, dividends, bank interest, and any other income that never appeared in a quarterly update.
- Pension contributions, Gift Aid, and other reliefs you are claiming.
Then you declare that it is complete and correct. The deadline is 31 January after the end of the tax year — the same date your tax return was due before.
End of Period Statements, which appeared in earlier drafts of MTD, were scrapped by HMRC in November 2024. There is no separate step between your last quarterly update and the Final Declaration.
Your payment dates do not change
Worth repeating because the fear is so common: quarterly updates do not create quarterly tax bills.
- Balancing payment for the year: 31 January
- Payments on account, if you make them: 31 January and 31 July
Source: GOV.UK: Self Assessment deadlines.
Exactly as before. Four updates a year, two payment dates a year, and they are not connected.
The one that catches people out
Bank interest is not part of a quarterly update. Neither is a part-time PAYE job, nor dividends from your own company. All of it waits for the Final Declaration.
This means your quarterly updates can look like a complete picture of your finances while missing a large part of your actual taxable income. Do not read a quarterly estimate as “what I will owe”.
Where TaxSwipe fits
TaxSwipe keeps the digital records Making Tax Digital requires and works out your cumulative quarterly figures from your categorised transactions, so the totals are ready when each deadline comes round.
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