Quarterly Tax Reporting for Sole Traders — What Is Changing and How to Prepare
HMRC is introducing quarterly reporting for self-employed people under Making Tax Digital. Here is what changes, when, and how to stay ahead.
What Is Quarterly Tax Reporting?
Under Making Tax Digital for Income Tax (MTD ITSA), self-employed people and landlords will need to submit a summary of their income and expenses to HMRC every three months — instead of once a year via Self Assessment.
This is one of the biggest changes to the UK tax system in decades.
When Does It Start?
| From | Affected Taxpayers |
|---|---|
| April 2026 | Income over £50,000 from self-employment or property |
| April 2027 | Income over £30,000 |
| April 2028 | Income over £20,000 |
If you are below the threshold now but growing your income, this will affect you sooner than you think.
What Do Quarterly Updates Include?
Each quarterly update is a summary of:
- Your total income for the period
- Your total allowable expenses by category
- Any other relevant figures
It is not a tax payment — it is a reporting update. HMRC uses the information to give you a running estimate of your tax liability throughout the year, so there are no January surprises.
When Are Quarterly Deadlines?
If your accounting period follows the tax year (April to April):
| Quarter | Deadline |
|---|---|
| 6 April – 5 July | 5 August |
| 6 July – 5 October | 5 November |
| 6 October – 5 January | 5 February |
| 6 January – 5 April | 5 May |
What Happens at the End of the Year?
You still file an end-of-year declaration to confirm your final figures and include any additional income (dividends, employment, rental). This replaces the current Self Assessment return.
What Software Will You Need?
You must use HMRC-recognised software to file quarterly updates. You cannot file directly through the HMRC website as you can with Self Assessment today.
HMRC publishes a list of approved MTD software on their website. Pivitax is designed with MTD compliance in mind — your income and expenses are tracked digitally throughout the year, categorised automatically, and available to export at any time.
How to Prepare Now
Even if quarterly reporting does not apply to you yet, here is what to do:
- Start keeping digital records today — paper records will not meet MTD requirements
- Track income and expenses monthly, not just in January
- Categorise every expense correctly — the categories you use now will map to MTD categories
- Choose software that will support MTD when the deadline arrives
Will Tax Bills Change?
No — quarterly reporting changes when you report, not how much you owe. Your tax bill is still based on your annual profit. The difference is that HMRC will know throughout the year what you are likely to owe, rather than finding out in January.
Summary
- Quarterly reporting starts April 2026 for income over £50,000
- You will submit four updates per year plus an end-of-year declaration
- Digital record-keeping is mandatory under MTD
- Start building the habit of tracking income and expenses monthly now
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