Making Tax Digital · Sole traders
A month before the MTD deadline: spread the filing work across four stages
ONLY£15A MONTHA month is enough time to divide the work into manageable stages, provided you first establish what is missing.
A month is enough time to divide the work into manageable stages, provided you first establish what is missing. Use collection, reconciliation, review and submission as separate tasks. The plan works best when each task ends with a clear result.
Stage one: collect complete sources
List the business bank accounts, cash records, payment providers and agents involved. Obtain statements for the full reporting period and check that exports actually contain the expected dates. Ask for missing documents early.
Stages two and three: reconcile and review
Explain gross receipts, deductions and payouts, identify private transactions and inspect duplicate imports. Then compare the summary categories with the reconciled records. Give unusual amounts an explanation rather than repeatedly checking the same grand total.
If someone else reviews or submits, agree the handover date and the questions still open. Reserve time for a reply. A plan that sends everything to the accountant on the deadline does not provide a meaningful review stage.
Stage four: submit and confirm
For the first 2026/27 update, the deadline was 7 August 2026. Use the actual deadline for the update you are handling; a calendar month is not always exactly four weeks. Confirm acceptance and store the result with the approved version.
Worked example: using the first week well
A retailer discovers in the collection stage that one provider's June statement is missing. The retailer requests it immediately and continues reconciling the other sources.
By the final review, the missing statement has arrived and the net payouts can be explained. Early collection solves a dependency that extra time spent on the already complete bank account would not address.
A review that checks more than the total
Start with coverage: the correct person, business and period, plus all relevant accounts and cash records. Then look at completeness. A feed can be connected today while still missing an earlier week. Confirm the earliest and latest transactions against the source.
Next, inspect unusual items. Large transfers, loan receipts, refunds, net settlements and private purchases often need more context than a bank description provides. Check for duplicate imports where a statement overlaps a live feed. An automatic warning is useful evidence to investigate, not proof that the entry must be removed.
Finally, review category totals. A category unexpectedly showing zero, a large increase or a negative amount deserves an explanation. You do not have to make every annual tax adjustment at this stage, but you should understand the records behind the summary you approve.
HMRC explains what quarterly updates contain. Keep the approved version and the resulting acknowledgement together. If something later changes, correct the source record and use the software's supported update process so you can explain which figures are current.
Keep the reporting dates separate from payment dates
The standard first update for 2026/27 covers 6 April to 5 July 2026 and was due by 7 August 2026. The second covers 6 April to 5 October 2026 and is due by 7 November 2026. The third and fourth deadlines are 7 February 2027 and 7 May 2027. These are cumulative updates, not four isolated sets of three-month totals.
Calendar periods have different cut-offs and the same filing deadlines. Check the setting for each business rather than assuming the dates from a bank statement. HMRC lists both reporting calendars.
The annual return for 2026/27 is due by 31 January 2028. The earlier 2025/26 return normally remains due online by 31 January 2027. Keeping those years distinct avoids a common transition-year misunderstanding.
Payments on account, where required, follow their own January and July timetable. An update acknowledgement confirms a reporting event; it does not confirm that an outstanding tax bill has been paid. Check your actual HMRC account and payment obligations separately from the software's progress indicators.
Understand the first-year concession
HMRC states that there are no penalties for missing quarterly-update deadlines for the 2026/27 tax year. That concession does not remove the digital-record or quarterly-reporting obligations, and it does not make all tax returns and payments penalty-free. Read the precise penalty guidance.
Outstanding quarterly reporting must be dealt with before completing the relevant annual return. However, a missed August 2026 update should not be described as an automatic penalty on the separate 2025/26 return due in January 2027. The 2026/27 annual-return deadline is January 2028.
After the first-year concession, the points rules apply to missed quarterly deadlines as described by HMRC. Do not assume that multiple businesses create multiple points at the same deadline. Annual-return rules, late-payment penalties and interest require their own checks.
If you have fallen behind, establish what is outstanding and work through the supported catch-up process. Keep evidence of technical problems and contact the appropriate support team with the business, period and error details. The useful next step is a complete record and an accepted update, rather than guessing what a generic warning might mean.
Keep a short progress record
Record which sources are complete, which questions remain and who will submit. If you are already closer to the deadline, compress the stages without skipping the checks. If late, establish the actual obligations and use the catch-up route.
Take the next step
Avona.app offers a self-service route from £15/month. Bring your records together, review the figures and choose a workflow that fits your business. For professional help, discuss the scope and total price of Avona Concierge, managed by chartered accountants, before choosing a service.