MTD quarterly updates: a workflow for accountants

What are the MTD quarterly update deadlines?

Making Tax Digital for Income Tax became mandatory on 6 April 2026 for sole traders and landlords with qualifying income over £50,000. HMRC reported in August that more than 436,000 had sent a first update and more than 570,000 had signed up. So the second deadline, 7 November 2026, is about to arrive for a large group of taxpayers.

The GOV.UK guide sets out these periods. Calendar periods suit those with accounting periods of 1 April to 31 March, and they can only be chosen before the first update of the year is sent.

Note that the periods are cumulative. Each update covers everything from the start of the year, so it's a running total rather than three months in isolation.

What does the penalty-free year really cover?

This is commonly misunderstood. For 2026/27, there are no penalties for late quarterly updates. But HMRC is clear that updates still have to be sent before the tax return can be filed, and that late returns and late payments still carry consequences. So a client who ignores all four updates hasn't escaped anything. They've simply moved the work to January 2028.

In the first year of the new regime, taxpayers also get one 30-day window to pay or set up a payment plan before penalties begin. Volunteers follow different rules, including a lower threshold of 2 points for late returns. Check the guidance for each client's position, as these details are easy to mix up.

Who joins next, and why does it matter this January?

The next cohort is the part few practices have fully worked through. HMRC's agent toolkit says qualifying income above £30,000 on a 2025/26 return brings a client in from 6 April 2027, and above £20,000 on a 2026/27 return brings them in from 6 April 2028.

That means the returns on your desk for 31 January 2027 are also the test for next April. And qualifying income is total gross income from self-employment and property, before expenses and tax. Plenty of clients think of themselves as earning far less than that.

Worked example: the client who doesn't think they're in scope

These figures are illustrative. Priya runs a small consultancy with £19,000 turnover and £7,000 of expenses. They also let out a flat for £14,400 a year, and it costs them £9,000 to run. Their profits come to £17,400, which sounds a long way below the threshold. But their qualifying income is £19,000 + £14,400 = £33,400, so they'd be in from April 2027. Their PAYE salary and dividends don't count toward this test.

As you complete each 2025/26 return, add a step: record the gross figure and flag anyone between about £25,000 and £50,000. That gives you next year's list without a separate project.

How should a practice structure the quarterly routine?

Much of the advice around MTD concentrates on the software. The bigger change for a practice is that a once-a-year client now has four touchpoints, with four chances to run late. Build one repeatable routine and apply it to everyone.

1. Day 1 after the period ends: automatic message to the client saying the period has closed and what to do.
2. Day 7: records cut-off. Client confirms that bank feeds are connected, and all items are entered.
3. Day 10: staff member reviews categories, queries anything unusual and checks each income source is present.
4. Day 20: client answers any queries.
5. Day 25: update is sent, or the client confirms they've done it, and the job is marked complete.
6. After sending: client gets a short note with their year-to-date figures and any tax planning point.

The standard periods leave around a month between the end of the period and the deadline, so that timetable leaves a few days' slack. Keep that margin, because a broken bank feed always shows up in the final week.

Who does what? Split the work before it splits you

Clients can send updates themselves, or you can do so on their behalf. HMRC's toolkit says updates are summaries, and that no tax or accounting adjustments are needed for them. Those come later, ahead of the tax return. Agree who does which step in writing, for each client, using a split like this.

Each level needs its own fee and engagement letter wording, covering what happens if the client misses your cut-off. Billing monthly or quarterly usually suits this work better than one large annual invoice, and it reflects how the work now falls.

Also check your authorisations. GOV.UK's sign-up guidance says agents need an agent services account, separate from the older HMRC online services account. Existing Self Assessment authorisations are recognised, but you should check that they appear there.

What should you do before 7 November?

Here's a short checklist for this week. Add it to your job list today, because the deadline falls on a Saturday this year and most clients will be thinking about it on Friday.

• List every mandated client, plus any volunteers, with their period type and income sources.
• Check which clients sent the August update. Anyone who didn't needs that catching up, as the November figure covers it anyway.
• Contact clients with missing bank feeds or unconnected software first.
• Check that any new income source has been added. Each source needs its own data.
• Note any errors found in the August figures. These can be corrected in records and picked up in the next update.
• Tell late clients plainly that no points apply this year, but updates must be sent before the return.
• Check any client who received a sign-up letter from HMRC, which it said would begin from September.

After 7 November, spend half an hour noting which clients needed the most chasing. Those are the ones who'd collect points from April 2027, and they should hear about it from you now rather than from HMRC later.

How do you prepare the April 2027 cohort?

Clients coming in at £30,000 are often smaller businesses, and many will never have used bookkeeping software. Five months is enough time if you start in February, once you've got the list from your January returns. This is a timetable that fits around the busy period.

• February 2027: confirm the list from filed 2025/26 returns. Write to each client saying they're likely to be in scope, and explain why, using their own gross figure.
• March 2027: agree the service level and fee, choose compatible software with them and get bank feeds connected.
• Before 6 April 2027: check that authorisations appear in your agent services account, then sign up each client individually.
• April to July 2027: run one practice month with them, reviewing what they've recorded and correcting habits early.
• 7 August 2027: first update for this cohort, and penalty points now apply to it.

For sign-up, GOV.UK says you'll need the client's full name, date of birth and National Insurance number, plus the business name, address and nature of business for sole traders, and start dates for recent income sources. Collect these with the client's permission, in one go, instead of asking for them piecemeal. Some clients may be exempt, so check that first as well.

This group won't have the first-year concession on late updates that this year's cohort has, so they'll need your routine working from their first quarter. That's the main reason for practising now, using the clients you've already got, while a missed date costs nothing in points. Treat each slip this year as a free lesson about where your process breaks, and fix it before February.

How Zaquil handles MTD quarterly update workflows

Let's be precise about the role: Zaquil isn't your MTD filing software, so updates still go through your HMRC-compatible product. Zaquil runs the routine around them, which is where four deadlines per client get lost.

• Recurring jobs: create a quarterly job from a template with the routine above as its checklist. Jobs repeat automatically and sit on a kanban board, so you can see who's stuck at records, review or sending. Deadlines sit against each one.
• Automations: when a period closes, a reminder goes out. If the checklist step isn't done by your cut-off, a chaser goes out and a task lands with the staff member.
• What the client sees: a branded portal to upload anything requested, answer queries in a questionnaire, and approve figures, with no hunting through email threads.
• Communication: email, chat, SMS, WhatsApp and calls in one inbox against the client record, with AI reply drafts from your knowledge base, for staff to review before sending.
• Fees: recurring invoices to match each service level, paid online, plus billing of any unbilled catch-up time.

The accounting and tax setup shows how this is arranged, and pricing starts from $19 a month with a 14-day free trial and no credit card to start. Set it up on a few clients before the 7 February deadline.