Quarterly Submissions

Understanding quarterly submissions

Under Making Tax Digital, sole traders must submit a summary of their income and expenses to HMRC every quarter. Accounted and Penny handle most of the heavy lifting, but it's important to understand what's being submitted and when.

What's included in a quarterly update?

Each quarterly submission contains a summary of your business income and expenses for that period, broken down by category. Specifically, it includes:

• Total business income — All money received into your business during the quarter, including sales, fees, and other trading income.
• Allowable expenses by category — Your business expenses grouped into HMRC's standard categories, such as office costs, travel, stock and materials, and professional fees.
• Net profit or loss — The difference between your income and expenses for the quarter.

Quarterly updates are cumulative. This means your Q2 submission includes Q1 and Q2 figures combined, Q3 includes Q1 through Q3, and so on. HMRC uses this rolling total to give you an in-year estimate of your tax liability.

When are they due?

For the standard tax year (6 April to 5 April):

• Q1 (6 Apr – 5 Jul): Due by 7 August
• Q2 (6 Jul – 5 Oct): Due by 7 November
• Q3 (6 Oct – 5 Jan): Due by 7 February
• Q4 (6 Jan – 5 Apr): Due by 7 May

How Penny handles it

As your quarterly deadline approaches, Penny will:

1. Send you a reminder via WhatsApp — Typically two weeks before the deadline, and again one week before.
2. Prepare a summary — Penny compiles all your categorised transactions for the period and generates a submission-ready summary.
3. Flag any issues — If there are uncategorised transactions, missing receipts for large expenses, or anything else that needs your attention, Penny will let you know before submission.
4. Ask for your approval — You'll receive a clear summary in your Accounted dashboard (and via WhatsApp) showing exactly what will be submitted. Nothing goes to HMRC without your explicit confirmation.
5. Submit to HMRC — Once you approve, Penny submits the update and provides you with a confirmation receipt including HMRC's acknowledgement reference.

What if I miss a deadline?

During the initial soft-landing period, HMRC has confirmed that late submission penalties will not apply for the first year. After that, repeated late submissions may result in penalty points under the new points-based penalty regime.

That said, it's best to submit on time. Accounted's reminders make it straightforward to stay on track.

Can I amend a quarterly update?

Yes. If you discover an error after submitting, you can submit an amended update for the same quarter. The new submission replaces the previous one. Penny will guide you through the amendment process if needed.

Reviewing before you submit

We strongly recommend reviewing your transactions before each quarterly submission. Check that:

• All transactions are categorised correctly
• No personal transactions have been included as business expenses
• Large or unusual transactions have supporting receipts
• Any transactions Penny flagged for review have been resolved

A few minutes of review each quarter can save significant hassle at year-end.