Mistakes in Making Tax Digital for Income Tax quarterly updates are not fixed by amending the update that went wrong. Because every update covers the tax year to date, the error is corrected in the digital records and the corrected totals flow into the next update. Regulation 17 of the Income Tax (Digital Obligations) Regulations 2026 requires the correction to reach HMRC by the next update deadline or, for the fourth update, by the tax return deadline.

Why are quarterly updates cumulative?

Regulations 12 and 13 of SI 2026/336 define each quarterly update period as starting on the same date: 6 April under standard update periods, or 1 April where a calendar quarters election has effect. Only the end date moves. Under standard periods the four periods end on 5 July, 5 October, 5 January and 5 April, with deadlines of 7 August, 7 November, 7 February and 7 May.

HMRC’s guidance on sending quarterly updates explains the purpose: each update shows total income and expenses for the year so far, for each business, so that corrections made to the records are picked up in the next update. An update contains category totals, not individual transactions, and HMRC describes updates as summaries rather than tax returns. No accounting or tax adjustments are needed before an update is sent.

The practical result is that the third update replaces the picture given by the first two. If the first update overstated repairs by £400 and the record is corrected in September, the second update simply shows the correct year to date total.

What does the law require when an error is found?

Regulation 17 sets out two duties:

  • A person who discovers an error or omission in a digital record must correct that record using functional compatible software, and must do so as soon as possible (regulation 17(1)).
  • A person who discovers an error or omission in a quarterly update must use the software to give HMRC the correct or complete information (regulation 17(2)).

The deadline for the second duty depends on which update was wrong. For the fourth update, or the update for the period in which the person stops being within MTD, the information must reach HMRC no later than the date the return for that year is due (regulation 17(3)). For any other update, it must reach HMRC no later than the next date on which an update is required (regulation 17(4)). Regulation 3 builds this into the definition of functional compatible software, which must be able to give quarterly updates and corrections to them, and keep and correct digital records.

How is an error corrected during the year?

HMRC’s record keeping guidance says a correction may mean changing, deleting or creating a digital record, for example where a transaction was mistyped or income was missed. A correction made during the year is fixed when the next update is sent. Where the agent keeps the records, the agent can make the correction.

Where records are kept in a spreadsheet and submitted through bridging software, HMRC says the correction must be made in the spreadsheet and then digitally linked through to the bridging software, not typed into the bridging tool. The mechanics are covered in our page on bridging software for MTD.

Two related situations are treated in the same cumulative way:

  • Estimated figures. Where a trust or partnership tells the client about personal self employment or property income after an update deadline, the client can estimate and then update the record when the figure is confirmed, or record nothing until it is confirmed. Either way the confirmed figure goes into the next update.
  • Early updates. An update can be sent up to 10 days before the end of the period if no more transactions are expected. If one does arise, it is recorded and goes into the next update.

What about errors found after the fourth update?

Once the fourth update has gone, there is no later update to carry the correction. HMRC’s guidance gives two routes, either of which must be completed before the Income Tax position is finalised:

  1. correct the digital record and resend the fourth quarterly update, which HMRC suggests may be easier for clients who keep their own records; or
  2. adjust the category total in the software and reflect the change in the digital records, which HMRC says an agent may do and then ask the client to update the records.

HMRC says resending the fourth update should happen before any tax adjustments are made. Errors found after the return has been submitted follow a different route: regulation 16 allows the return to be amended through software under section 9ZA of the Taxes Management Act 1970. See our pages on the MTD final declaration and amending a tax return.

Which differences are adjustments rather than errors?

Not every year end change means an update was wrong. HMRC’s guidance on adjusting income lists items that are made by changing the annual category totals after the fourth update: removing disallowable expenses, accruals and prepayments under traditional accounting, adjustments for an accounting period that does not match the tax year, reliefs such as the trading income allowance, and capital allowance claims. A mortgage payment recorded in full can be adjusted down to the interest element at the year end. Treating these as corrections and reworking every quarter wastes time.

Can a wrong setting be put right?

Some errors are in the set up rather than the figures:

  • Update periods. Calendar update periods must be chosen before the first update for the year, and the choice cannot then be changed for that year. HMRC says a client starting in 2026 to 2027 who forgot to select calendar periods will need adjustments after the year end, with guidance to follow.
  • Categorisation. A business below £90,000 turnover can use simpler categories. If turnover reaches £90,000, all records for that source from the start of the year must be categorised in full before the next update can be sent. A firm that guessed wrongly faces a recategorisation exercise, which is why HMRC suggests full categories if in doubt.

Are there penalties for errors in updates?

HMRC’s penalty guidance describes points based penalties for late updates, not for inaccurate ones. There are no points for late updates in 2026 to 2027. From later years one point is charged per missed deadline and a £200 penalty applies at 4 points. Because a late update is a separate failure from a wrong one, sending an update on time with known gaps and correcting them in the next update is generally safer than missing the deadline. Tax is finally charged on the figures in the tax return, so that is where accuracy is tested; see HMRC penalties for tax return errors.

How does a correction work in practice?

Illustration only. A sole trader using standard periods sends the first update showing turnover of £18,000 and expenses of £4,000. In October the agent spots a £1,200 sales invoice posted twice in June. The duplicate record is deleted. The second update, due 7 November, shows cumulative turnover of £34,800: the corrected first quarter figure of £16,800 plus £18,000 earned between 6 July and 5 October. Nothing is resubmitted for the first quarter. In May, after the fourth update, the agent finds a missing £300 phone bill. The client keeps their own records, so the record is added and the fourth update resent before the year end adjustments.

What mistakes come up most often?

  • Trying to resubmit an earlier quarter instead of letting the next update carry the correction.
  • Correcting figures in bridging software rather than in the linked spreadsheet.
  • Adjusting a category total after the fourth update without also updating the digital records.
  • Treating disallowable items and capital costs as errors to be fixed quarterly.
  • Missing a deadline to perfect an update that could have been corrected in the next one.

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Sources

Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 8 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.