Blog · UK practice and MTD · 2 November 2026

MTD for Income Tax Quarterly Updates: A Capacity Plan for UK Practices

By Keshav Bansal, CA · Last reviewed 2 November 2026

MTD for Income Tax quarterly updates have turned Self Assessment from a once-a-year job into a rolling one. For a UK accounting practice, that is mainly a capacity problem: the same team that used to clear its sole trader and landlord work between April and January now has to touch every client in scope four times a year, and still deliver the tax return by 31 January.

This article sets out a simple way to plan that capacity: count the submissions, put them on a calendar, decide who does which step, and choose what to keep in-house and what to share. The rules quoted come from HMRC’s current guidance on GOV.UK, which we name in each section. HMRC updates these pages, so check them again before you rely on a date for a particular client.

Who is in scope, and when

HMRC’s page “Find out if and when you need to use Making Tax Digital for Income Tax” (last updated 26 March 2026) applies to sole traders and landlords registered for Self Assessment, based on qualifying income from self-employment and property:

• over £50,000 in the 2024 to 2025 tax year: from 6 April 2026
• over £30,000 in the 2025 to 2026 tax year: from 6 April 2027
• over £20,000 in the 2026 to 2027 tax year: from 6 April 2028

HMRC checks each Self Assessment return and writes to people who cross a threshold, but the same page says it is still the taxpayer’s responsibility to check. Partnerships will follow on a timetable HMRC has not yet set. For capacity planning, that means your MTD client list grows in two more steps, and the 2025 to 2026 returns you prepare this winter decide who joins in April 2027.

Step 1: count submissions, not clients

HMRC’s “Send quarterly updates” guidance says an update is due every 3 months for each self-employment and property business. All UK property counts as one business, foreign property as another, and each separate trade is its own business (HMRC, “Choose agents for Making Tax Digital for Income Tax”). A nil update is still required if nothing happened in the period.

So a landlord who also runs a sole trade needs two updates each quarter. Build your plan on this number:

• Quarterly units = number of businesses across your in-scope clients × 4
• Year-end units = one tax return per client, covering all income and gains

For example, a practice with 120 MTD clients averaging 1.3 businesses each is planning for about 624 quarterly updates a year plus 120 returns, before any resubmissions. That is the workload to staff, and it is the number that changes in April 2027 and April 2028.

Step 2: put the deadlines on one calendar

Under HMRC’s guidance, standard update periods end on 5 July, 5 October, 5 January and 5 April. Calendar update periods, for clients whose accounting period runs 1 April to 31 March, end on 30 June, 30 September, 31 December and 31 March. The deadlines are the same for both: 7 August, 7 November, 7 February and 7 May. Each update is cumulative from the start of the tax year, so later updates pick up corrections to earlier records.

Two details matter for planning. First, the period type must be chosen in software before the first update and cannot be changed for the rest of the tax year. Second, an update can be sent from the end of the period up to the deadline, or up to 10 days early if the client expects no more transactions. In practice your team has a working window of about a month after each quarter end, and the 7 February update lands one week after the 31 January return deadline. That February squeeze is where most practices will feel the strain first.

Step 3: know what the penalties are, and when they start

HMRC’s “Penalties for Making Tax Digital for Income Tax” page (last updated 30 March 2026) sets out a points-based system. For the 2026 to 2027 tax year, HMRC will not apply penalty points for late quarterly updates, though the updates must still be sent before the return can be submitted, and late returns still earn points. From later tax years, each missed quarterly or return deadline adds a point (one per deadline, even with several businesses), and reaching 4 points brings a £200 penalty, then £200 for each further miss.

Late payment penalties are separate and are not points-based. For 2026 to 2027 they are 3% of tax owed at day 15 and another 3% at day 30, plus 10% a year from day 31, with a 30-day grace period in a taxpayer’s first year. The soft landing on quarterly penalties gives you this tax year to fix your process, not to skip updates.

Step 4: split the work into preparer and reviewer tasks

HMRC’s guidance says quarterly updates are summaries, not tax returns, and need no accounting or tax adjustments. That makes them good candidates for a preparer-led workflow, with senior time kept for the year-end:

• Preparer: chase and capture records, code transactions to the Self Assessment categories, reconcile bank feeds, and draft the update in software.
• Reviewer: spot-check the cumulative totals against last quarter, clear queries, and approve submission.
• Year-end: resend the fourth update if records need correcting, make accounting and tax adjustments, add other income, and complete the return.

HMRC also allows a client to have one main agent and several supporting agents. A supporting agent can send quarterly updates but cannot submit the tax return or view the tax calculation; only the main agent can submit the client’s return, after sharing a copy and getting the client’s written confirmation (HMRC, “Submit your tax return”). If more than one party works on the same business, HMRC expects one combined update for each period.

Step 5: decide what to keep in-house

The quarterly preparer tasks are repeatable, and the deadlines are fixed. That is the part of the workload practices most often consider sharing with an outsourced team, while keeping client contact, agent authorisations, review and every HMRC submission in-house. A useful test is simple: if a task needs judgement about the client’s overall tax position, keep it; if it is records work against a known checklist, it can be prepared elsewhere and reviewed by you.

Before you share anything, agree a records cut-off for each quarter that leaves at least two weeks for review before the 7th, a query log with a named owner on your side, and a review pack format your seniors can sign off quickly. Our page on outsourced MTD for Income Tax support for UK practices explains how our team fits into that split.

To test this on one real file before committing, read how the free 20-hour trial works; a mutual NDA comes first.

Where this fits in your practice

Tax Brew supports UK accountants with MTD for Income Tax quarterly updates, Self Assessment preparation and the bookkeeping behind them, in your software. You stay the agent with HMRC. Email info@taxbrewglobal.com.