Quarterly tax reporting: what accountants and their clients should expect
We’ve created a simple walkthrough following a typical client through their first full year under Making Tax Digital for Income Tax. Meet Sam a freelancer who has just started his first tax year under MTD for Income Tax, with his accountant supporting him throughout the process.Article by Coconut
Note: This example follows the 2026/27 tax year, which is the first year many self-employed individuals will begin quarterly reporting under Making Tax Digital for Income Tax, while still completing a Self Assessment tax return for the previous 2025/26 tax year.
April 2026
The 2026/27 tax year begins. Sam’s business is running steadily, clients are paying on time and, like many sole traders, he’s used to thinking about tax once a year.
Now, instead of leaving everything until January, Sam must submit quarterly updates throughout the year. Naturally, his first reaction is that this sounds like four times the work.
This is where his accountant steps in early. Together, they put simple systems in place from day one:
- Opening a dedicated business bank account
- Capturing receipts as they arise
- Using MTD-compatible software to track income and expenses
- Building regular bookkeeping habits into Sam’s routine
Rather than waiting for year-end, Sam’s records begin staying up to date throughout the year.
August 2026
The first quarterly update deadline arrives on 7 August 2026.
For the first quarterly submission, Sam’s accountant reviews the digital records, confirms income and expenses for the quarter and submits the update to HMRC. Because the bookkeeping has been maintained throughout the quarter, the process is far more straightforward than a traditional year-end scramble.
Importantly, Sam now has an early indication of his potential tax position, something he would previously not have considered until January.
For accountants who have not yet formally communicated the changes to clients, the period leading up to the first quarterly deadline is also an ideal opportunity to issue updated engagement letters covering Making Tax Digital for Income Tax responsibilities, quarterly submissions and client expectations.
Many firms are using this stage to:
- Clarify what services are included under MTD
- Outline client responsibilities for record keeping
- Set expectations around deadlines and communication
- Introduce or transition clients onto MTD-compatible software
Firms taking an early engagement approach are finding clients more prepared and responsive once quarterly reporting begins.
October 2026
By the second quarter, the process is already becoming more routine.
Sam’s accountant notices several improvements:
- Fewer missing receipts and incomplete records
- Better visibility over Sam’s cash flow and profitability
- Less time spent chasing information at year-end
- More regular client engagement throughout the year
Rather than tax becoming a once-a-year panic point, it is gradually becoming part of Sam’s normal business administration.
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April 2026
The 2026/27 tax year begins. Sam’s business is running steadily, clients are paying on time and, like many sole traders, he’s used to thinking about tax once a year.
Now, instead of leaving everything until January, Sam must submit quarterly updates throughout the year. Naturally, his first reaction is that this sounds like four times the work.
This is where his accountant steps in early. Together, they put simple systems in place from day one:
- Opening a dedicated business bank account
- Capturing receipts as they arise
- Using MTD-compatible software to track income and expenses
- Building regular bookkeeping habits into Sam’s routine
Rather than waiting for year-end, Sam’s records begin staying up to date throughout the year.
August 2026
The first quarterly update deadline arrives on 7 August 2026.
For the first quarterly submission, Sam’s accountant reviews the digital records, confirms income and expenses for the quarter and submits the update to HMRC. Because the bookkeeping has been maintained throughout the quarter, the process is far more straightforward than a traditional year-end scramble.
Importantly, Sam now has an early indication of his potential tax position, something he would previously not have considered until January.
For accountants who have not yet formally communicated the changes to clients, the period leading up to the first quarterly deadline is also an ideal opportunity to issue updated engagement letters covering Making Tax Digital for Income Tax responsibilities, quarterly submissions and client expectations.
Many firms are using this stage to:
- Clarify what services are included under MTD
- Outline client responsibilities for record keeping
- Set expectations around deadlines and communication
- Introduce or transition clients onto MTD-compatible software
Firms taking an early engagement approach are finding clients more prepared and responsive once quarterly reporting begins.
October 2026
By the second quarter, the process is already becoming more routine.
Sam’s accountant notices several improvements:
- Fewer missing receipts and incomplete records
- Better visibility over Sam’s cash flow and profitability
- Less time spent chasing information at year-end
- More regular client engagement throughout the year
Rather than tax becoming a once-a-year panic point, it is gradually becoming part of Sam’s normal business administration.
November 2026
The second quarterly update for the 2026/27 tax year is due by 7 November 2026.
Again, Sam’s accountant reviews and submits the quarterly figures, confirming income, expenses and profit or loss for the period.
Because the process is now embedded into regular workflows, the submission takes significantly less effort than the first quarter.
January 2027
Alongside quarterly reporting obligations, Sam must still submit his 2025/26 Self Assessment tax return by 31 January 2027.
This is an important transition period for accountants to communicate clearly with clients:
- The 2025/26 Self Assessment return finalises the previous tax year
- The quarterly updates relate separately to the ongoing 2026/27 tax year
For many firms, this overlap will reinforce the importance of proactive client communication and structured workflows.
February 2027
By 7 February 2027, Sam’s accountant needs to submit the third quarterly update for the 2026/27 tax year.
At this stage, both Sam and his accountant are comfortable with the process. The regular submission cycle means records are largely maintained in real time, reducing the risk of errors and missing information.
May 2027
The fourth and final quarterly update for the 2026/27 tax year is due by 7 May 2027.
By now, much of the information needed for the finalisation process has already been reviewed throughout the year. Instead of facing a large backlog of bookkeeping and reconciliations at year-end, the work has been spread more evenly across the tax year.
Key dates to know
For the 2026/27 tax year under Making Tax Digital for Income Tax, the quarterly update deadlines are:
- Quarter 1: Due 7 August 2026
- Quarter 2: Due 7 November 2026
- Quarter 3: Due 7 February 2027
- Quarter 4: Due 7 May 2027
What Sam’s accountant learned
By the end of the year, quarterly reporting no longer felt like an additional burden it simply became part of a more consistent process for managing client records and tax obligations.
The biggest contributors to a smooth transition were:
- Encouraging clients to keep records up to date
- Embedding tax management into regular business processes
- Helping clients plan ahead for tax liabilities
- Using the right digital tools and software
- Starting client communication and engagement early
For Sam’s accountant, one of the biggest lessons was that early preparation made the transition significantly smoother. Engagement letters, onboarding conversations and regular client communication helped reduce confusion and improve record keeping from the outset.
With the first wave of MTD clients now settled into quarterly reporting, the firm also feels far more prepared for the next phase of Making Tax Digital, including the expansion to those earning over £30,000 from April 2027.
So, what should accountants expect?
For many clients, the first quarterly update will feel unfamiliar. But with the right systems and guidance in place, the process quickly becomes more manageable.
The second submission typically feels easier, by the third it becomes routine and, over time, quarterly reporting can create better visibility for both accountant and client with fewer surprises and less pressure at year-end.
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