How to self-file your MTD quarterly update — step by step

From April 2026, many sole traders earning above £50,000 must send quarterly digital updates to HMRC under Making Tax Digital for Income Tax. You do not need expensive software to do the actual filing — HMRC provides a free service. You do need accurate numbers. This guide shows you how to self-file using HMRC's tool and Billdr for record-keeping.

What is a quarterly update?

It is a summary of income and expenses for a three-month period — not a full tax return. You submit it digitally. HMRC uses it to estimate tax during the year. At tax year end you still complete a final declaration (similar in spirit to Self Assessment).

The quarterly deadlines

• Q1: 6 April – 5 July → file by 7 August
• Q2: 6 July – 5 October → file by 7 November
• Q3: 6 October – 5 January → file by 7 February
• Q4: 6 January – 5 April → file by 7 May
• Final declaration: by 31 January following the tax year

Miss a deadline? Read what happens if you miss the MTD deadline.

What numbers you need each quarter

• Total income: money received from customers in the quarter — paid invoices only, not quotes or unpaid invoices
• Total expenses: all business expenses, ideally by category (materials, travel, office, professional fees, other)
• Mileage claim — include within travel/vehicle costs
• CIS deductions tracked separately if you subcontract

How to prepare your numbers

Option A — Billdr (recommended): Billdr calculates totals from your invoices, expenses, and mileage. Open Dashboard → MTD Filing for your quarterly breakdown. Each figure has a copy button — tap to copy, paste into HMRC. Fastest and least error-prone.

Option B — spreadsheet: list paid invoices, total them; list expenses by category; add mileage separately. Works, but easy to miss receipts or double-count.

Step-by-step: HMRC's free tool

Step 1 — Sign in: go to gov.uk/guidance/use-making-tax-digital-for-income-tax and sign in with your Government Gateway ID. Register at gateway.gov.uk if you do not have one.

Step 2 — Select MTD for Income Tax and choose your self-employment business.

Step 3 — Select the quarter (e.g. 6 April – 5 July).

Step 4 — Enter income:total turnover for the quarter (paid invoices). Copy from Billdr's MTD Filing page if you use it.

Step 5 — Enter expenses: single total or category breakdown as HMRC asks. Include mileage in travel/vehicle. Billdr provides HMRC-style category totals ready to copy.

Step 6 — Review: HMRC shows income, expenses, and profit. Check against your records.

Step 7 — Submitand save HMRC's confirmation.

Step 8 — Mark submitted in Billdr so you can track which quarters are done.

What about VAT?

VAT registered? Your MTD for Income Tax update is separate from your VAT return. MTD income should be net of VAT — the VAT you charge is not your turnover for income tax purposes.

What about CIS?

Contractors report CIS deductions separately. Your MTD income is usually the gross amount before CIS was deducted — you reclaim deductions at year end. Billdr tracks deductions per contractor.

Do you need an accountant?

No — you can self-file completely. An accountant still helps with year-end planning, final declaration, and maximising claims. Billdr's accountant pack gives them organised records if you use one — often at lower cost because the data is already clean.

New to MTD? Start with what is Making Tax Digital for sole traders. For tax estimates, see how much tax you will pay in 2026/27.

Common mistakes to avoid

• Filing late — penalty points build up
• Confusing turnover with profit
• Forgetting mileage
• Including VAT in income when VAT registered
• Not reconciling records before you submit
• Leaving preparation until deadline day

Billdr calculates your quarterly numbers automatically. Copy and paste into HMRC's free tool. No FreeAgent required, no accountant required, no expensive software required. Try Billdr free for 30 days — no card required. Use code 3MONTHSFREE for 3 months free at www.billdr.co.uk.