MTD for Income Tax: what a practice actually does each quarter, and what to charge for it

The first MTD quarter ended on 5 July 2026 and the first updates were due on 7 August. AccountingWEB's headline on the experience was that it "leaves firms battered and bruised", and its explanation a few weeks later was blunter: MTD did not add tax work, it added the chasing. This guide is the cycle from the practice's side.

Who is in, this year and next

Qualifying income is gross self-employment and property income from the Self Assessment return, added together:

• over £50,000 in 2024 to 2025: in from 6 April 2026;
• over £30,000 in 2025 to 2026: in from 6 April 2027;
• over £20,000 in 2026 to 2027: in from 6 April 2028.

Run the list now for next April. Every client between £30,000 and £50,000 on their 2025 to 2026 return joins in six months, and they are the ones who have heard nothing about it. Our MTD deadline checker gives a start date from three years of figures.

The quarter, step by step

1. The period ends (5 July, 5 October, 5 January, 5 April, or calendar quarters by election).
2. Request the records. Bank statements, sales invoices, purchase receipts, and for landlords the agent's statements. The practice's first letter should go the day the period ends.
3. Chase. Most of the hours live here. Two reminders is normal; three for the usual suspects.
4. Capture and code. Bank feeds and receipt capture do most of it; the rest is keyed.
5. Review. The update is cumulative, year to date, so a correction goes into this quarter rather than an amendment of the last.
6. Submit by the 7th of the month after the period ends.

Steps 2 and 3 are the new work. For a client who sends records in a tidy folder on the 6th, the quarter is an hour. For one who sends photographs of receipts on the day of the deadline, it is a day, four times a year.

The arithmetic

A practice with 120 clients over the threshold now has 480 update deadlines a year plus 120 final declarations. If each update averages 90 minutes, that is 720 hours, which is a full-time person's working year, of which the practice can expect most to be chasing and keying rather than tax.

Pricing it

Three approaches are common:

• A quarterly fee per client, which matches the work to the money and makes the client think about sending records on time.
• A higher annual fee, simplest to sell, but it hides the four rounds of chasing behind one number.
• A records charge, where a client who misses the practice's records date pays for the chasing. This is the one that changes behaviour.

Whatever the model, put the practice's records dates in the engagement letter, so that "we needed these by the 20th" is a term, not a plea. Our guide on how to stop clients sending records late sets out the policy, and the records request letter maker gives you the three letters.

Penalty points

GOV.UK's penalties page says there are no penalties for missing a quarterly update deadline in the 2026 to 2027 tax year, though the updates must still be sent before the return can be submitted. For tax years after that, each missed quarterly update or return deadline earns one point, and four points is a £200 penalty, with £200 more for each deadline missed afterwards. No tax is due at the quarter, so from 2027 to 2028 the points are the only teeth. A client who misses two updates in a year is halfway to the first fine.

This is general information, not tax advice.