Heard of quarterly reporting but still not sure exactly what it entails? We’ve created a handy guide that walks you through a full year of someone experiencing it for the first time. So, meet Sam – a painter and decorator who’s just started his first full tax year under Making Tax Digital for Income Tax.
Note: This example follows the 2026/27 tax year, which is the first year many self-employed people 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
It’s the beginning of the 2026/27 tax year, work is steady and clients are paying on time. Things feel manageable but there’s something new that Sam has to get his head around.
Instead of leaving his tax return and bill until January, Sam needs to report income and expenses every quarter. At first, this sounds like more work with four deadlines instead of one. But Sam decides to stay organised from day one.
He opens a separate business bank account, starts taking pictures of receipts immediately and uses MTD software to track his income.
August 2026
7th August 2026 marks the deadline for the first quarterly update for the 2026/27 tax year. This means that Sam needs to submit a summary of income and expenses and his profit or loss for the period. Because Sam’s tracked everything along the way, he mostly just has to review and submit.
After about 30 minutes, Sam has a rough idea of how much tax might be owed – something that used to be a mystery until January.
October 2026
By the second quarter, things are feeling smooth and Sam has even noticed a few benefits. He no longer wastes time searching for missing receipts, he has a clearer picture of his cash flow and there are less surprises when it comes to his tax.
In fact, instead of tax being a huge panic once a year, it’s now part of Sam’s regular business admin.
November 2026
Sam must submit his second quarterly update for the 2026/27 tax year by 7th November 2026, again confirming his expenses, income, profit or loss.
January 2027
Sam still needs to submit his 2025/26 Self Assessment tax return by 31st January 2027. This is separate from his new quarterly reporting obligations for the 2026/27 tax year.
This Self Assessment submission finalises Sam’s 2025/26 tax position, while his quarterly updates continue separately for the 2026/27 tax year.
February 2027
By 7th February 2027, Sam needs to submit the third quarterly update for the 2026/27 tax year before that tax year ends in April 2027.
May 2027
The fourth and final quarterly update for the 2026/27 tax year is due by 7th May 2027. The quarterly updates help build the information needed for the end-of-year process, reducing the amount of work needed when finalising tax information later on.
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 learned
By the end of the year, Sam’s perspective has completely changed. What felt like more admin at the start actually became less stress, more visibility and greater control. But what made all the difference?
- Keeping records up to date
- Treating tax like a regular business task
- Setting money aside
- Using the right tools
So, what should you expect?
If you’re about to go through your first year of quarterly tax reporting, the first update might feel unfamiliar. But, the second gets easier, by the third it’s routine and by the end of the year you’ll wonder how you ever did it all at once.
Download Coconut today and connect your bank account. We’ll help you track your tax in real-time, so you can focus on growing your business.
PDA members receive a 25% discount off all Coconut price plans! If you can’t see the discount codes below, please login to the PDA website and refresh this page.