Transitioning to Quarterly Tax Returns: What You Need to Know
HMRC’s Making Tax Digital (MTD) initiative will require around four million taxpayers to submit quarterly returns instead of a single annual tax return. This change affects non-VAT registered sole traders, who will need to manage multiple submissions for different periods.
Additionally, these businesses must adopt digital record keeping in line with MTD rules. For assistance with compliance, consider MyTaxDoc.
Key Reporting Obligations for MTD
Quarterly Reports
You must submit a quarterly report for each trading or property business, detailing income and expenses in specified categories—essentially a mini set of accounts.
End of Period Statement
In addition to the quarterly reports, an EOPS is required for each business, resulting in a total of five reports to HMRC each year.
Submission Deadlines
Quarterly reports are due one month after each quarter ends, while the EOPS and finalisation statement must be submitted by 31 January following the end of the tax year.
When Does This Start?
From 2026, any self-employed business, sole trader, or landlord with an income exceeding £50,000 will need to comply with the Making Tax Digital rules. Those with an income over £30,000 will be required to do so from April 2027, with timelines for other small businesses yet to be reviewed.
Frequently Asked Questions
How do I become compliant with Making Tax Digital?
To comply with MTD, you need to use government-approved software for your accounts and submissions to HMRC. You can find suitable software through HMRC’s search tool or engage a reliable accountant like MyTaxDoc to manage it for you.
If you have any questions or need assistance, feel free to reach out!
Is MyTaxDoc Making Tax Digital compliant?
Yes, we use software that meets MTD requirements. If you’d prefer to avoid the hassle of setting up a digital system, contact us today, and we’ll ensure your accounts are fully compliant.
I’m not VAT registered—should I still comply with MTD?
Yes, even if you’re not VAT registered, it’s advisable to use HMRC-compliant digital accounting software, especially if you’re close to the VAT threshold. Furthermore, you may soon be required to submit quarterly returns, so consider using a reliable accountant like MyTaxDoc for just £32 per month plus VAT to ease the process.
What are MTD Digital Records, and what do I need to keep?
Keeping digital records is essential for MTD compliance. You must store your records in a digital format, either on a computer or in the cloud. You should still retain original paperwork for at least six years (or ten for VAT MOSS), as HMRC may request it during investigations. At MyTaxDoc, we can help by digitising your paperwork, ensuring compliance while saving you time.
Isn’t it free to submit my own Self Assessment Tax Return on the HMRC website?
Yes, it is free and usually straightforward to submit your return online. However, mistakes can be costly. For £75, a qualified accountant at MyTaxDoc can complete your return, providing peace of mind and allowing you to focus on what matters most.
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