Send a quarterly update to HMRC for Making Tax Digital for Income Tax
This article explains how to send a quarterly update to HMRC for Making Tax Digital (MTD) for Income Tax using FreeAgent.
Please note:
- FreeAgent’s MTD for Income Tax functionality is currently in pilot. Therefore, you’ll only have access to the functionality if your business is eligible for HMRC’s pilot scheme and meets FreeAgent’s eligibility criteria.
- This functionality is not currently available for unincorporated landlord FreeAgent accounts. However, we plan to support this shortly and will let you know once it is available.
- You’ll need full (level 8) access to your FreeAgent account in order to send a quarterly update to HMRC once you’ve prepared your accounts in FreeAgent.
- If you have a FreeAgent Practice Dashboard, you’ll need to switch to your client’s account to follow the steps below once you’ve set up your practice for MTD for Income Tax and signed up your clients.
HMRC has published detailed guidance for sole traders, landlords, and accountants who want to volunteer to use and test MTD for Income Tax for the 2024/25 and 2025/26 tax years. After you’ve signed up to test MTD for Income Tax, you’ll get access to a dedicated support team at HMRC. You’ll also be able to review and update your details through HMRC Online Services.
HMRC requires anyone registered for MTD for Income Tax to keep digital records and send totals for each income and expense category to HMRC every quarter. We do not send individual transactional data to HMRC since this is not required.
These quarterly updates can be submitted from the end of the quarter and are currently due on the 5th of the month after the end of the quarter. From April 2026, this deadline will be extended to the 7th of the month after the end of the quarter. The table in FreeAgent provides a useful timeline of when each quarterly update is due to be submitted.
By default, your quarterly updates will be set automatically to so-called ‘standard quarters’ by HMRC. The standard quarterly periods are based on the tax year and the quarters cover the following periods:
- Q1: 6th April to 5th July
- Q2: 6th July to 5th October
- Q3: 6th October to 5th January
- Q4: 6th January to 5th April
Alternatively, you can choose to use calendar update periods which end on the last day of the month. This may make your record-keeping simpler if your accounting period ends on 31st March. The calendar update periods cover the following periods:
- Q1: 1st April (or 6th April if you’re switching to calendar quarters) to 30th June
- Q2: 1st July to 30th September
- Q3: 1st October to 31st December
- Q4: 1st January to 31st March (or 5th April if you’re switching away from calendar quarters)
1. Navigate to the Self Assessment area
Begin by navigating to the 'Taxes' tab at the top of the screen and select 'Self Assessment' from the drop-down menu.
Select the relevant tax year from either the list on the left-hand side of the panel or from the 'History' drop-down menu.
2. Check your figures
Next, navigate to the Self Employment page and check that you’ve entered all of the relevant data for the quarter. In order to create an accurate quarterly report, FreeAgent needs to have all the details of your business’s bank transactions, invoices, bills and out-of-pocket expenses.
FreeAgent will automatically populate your total income for the quarter in the Income section of the Self Employment page.
FreeAgent will also automatically populate your total day-to-day running costs for the quarter in the Expenses section of the Self Employment page.
To view a breakdown of the transactions that make up a particular figure, select the relevant item from either the Income or Expenses list.
This will take you to the Show Transactions report filtered by tax reporting type and display all of the transactions that make up the figure for the tax year.
When you add or edit a spending category in FreeAgent, you're required to choose a tax return box for the category and to identify whether the category is allowable for tax or disallowable. Find out more about viewing the tax reporting type of an accounting category.
3. Submit your quarterly tax data to HMRC
Once you’re happy with the information, select ‘Send update’ in the top-right of the screen.
Start by selecting the period you want to report up to. You’ll see a list of any unfiled quarterly periods, along with the option to report for the year to date. The period you choose will determine which quarterly obligations are fulfilled.
If you miss a deadline, you can submit each quarterly update in order or file a later quarter straight away, which will automatically cover any missed periods. For example, if you don’t file by the Q1 deadline, you can still submit Q1 on its own, or you can file an update for Q2 by selecting ‘Up to Q2 (06 Apr 24 to 05 Oct 25)’, and HMRC will show both Q1 and Q2 as filed.
If you need to make changes to a previous update, such as adding missing income, FreeAgent will automatically update the correct year-to-date figures in your next submission.
Once you’ve selected the relevant period, select ‘Send update’. FreeAgent will then send the totals for each income and expense category shown on the previous screen.
Once you have sent an update to HMRC, it can take several minutes for the submission to be processed by HMRC.
Once the submission has been filed successfully, you will see a green banner at the top of the page and FreeAgent will display your annual tax estimate received from HMRC. You will be able to log in to your HMRC business tax account to check your submissions, quarterly obligations and tax estimates.
HMRC will provide you with an annual tax estimate based on the information you’ve submitted so far. This is then extrapolated by assuming the same income and deductions for the remaining days of the tax year, forecasting your final tax liability.
As a result, the estimate may change in future quarters and may differ from the actual tax liability due at the end of the tax year. This estimate is for informational purposes only, and you are not required to make any payments of income tax or National Insurance after submitting a quarterly update.
Find out how to view a breakdown of your tax estimate.
What happens next?
Once FreeAgent receives a response from HMRC in relation to your business’s submission, the software will automatically send an email to your registered FreeAgent email address to confirm whether the submission in question was accepted or rejected.
If you would prefer not to receive an email notification for these submissions, you can choose not to receive them by updating your FreeAgent communication preferences.
To do this, select ‘Settings’ from the drop-down menu in the top-right of the screen and then select ‘Communication Preferences’.
Untick the ‘Filing notifications’ checkbox in the ‘Emails’ area and select ‘Save Changes’ to complete the process.
Sending additional tax information
During the tax year you must send totals for each income and expense category to HMRC every quarter. If you wish to make your tax estimate more accurate you can send additional tax information to HMRC, such as adjustments and allowances or individual information.