Making Tax Digital · Sole traders
Correcting an MTD update: fix the records and use the supported process
ONLY£15A MONTHFinding an error after submission does not mean you should leave it until the annual return or disguise it as a new transaction.
Finding an error after submission does not mean you should leave it until the annual return or disguise it as a new transaction. Correct the underlying record and follow the software's supported update process. Cumulative quarterly reporting helps carry corrected year-to-date figures forward.
Correct the original event
If a receipt was omitted, restore it with the proper date and details. If an expense was duplicated, correct the duplicate while keeping the change explainable. Do not invent a current-period payment simply to reverse an earlier mistake.
HMRC's quarterly-update guidance explains corrections under cumulative reporting. Later updates include the corrected figures from the beginning of the reporting year, rather than only the latest three months.
Check where you are in the year
After the fourth quarterly update, corrections to the digital records may require that update to be resent before the annual work is completed. Tax adjustments and amendments to an already submitted annual return follow their own processes.
Keep the corrected source, revised totals and submission outcome together. Where VAT is also involved, assess the VAT correction separately. An Income Tax update does not automatically correct another tax return.
Worked example: a duplicated expense
An April £240 supplier payment was imported twice. The first update therefore includes £240 too much expense. The business corrects the duplicate in the April records.
The next cumulative update reflects the corrected year-to-date total. Recording an invented £240 sale in August would create a misleading transaction history and could distort other reports, even if the overall profit happened to match.
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 evidence connected to the figures
Your digital record should explain the amount, date and nature of the transaction. Keep the invoice, receipt, statement or other evidence that supports it. A photograph can make a paper document easier to retain, but a folder of photographs alone does not create complete transaction records.
For sole traders, HMRC normally requires business records to be kept for at least five years after the relevant 31 January filing deadline. Keep them longer where the rules for a late return, enquiry or other circumstances require it. Check the record-retention guidance.
Make the records usable by your future self. Include a short explanation where a bank description is vague, retain the calculation behind a business-use split and make corrections traceable. For a missing receipt, try the supplier account, email confirmation or a replacement invoice before relying on incomplete evidence.
At review time, compare your records with the bank or payment account and investigate differences. Equal totals are useful, but two errors can cancel each other out. A sample of individual transactions can reveal a duplicated purchase or an omitted customer receipt that a totals-only check misses.
Where this fits into Making Tax Digital
For 2026/27, the first mandatory phase generally covers individuals whose combined qualifying self-employment and property income was more than £50,000 in 2024/25, subject to exemptions. Qualifying income normally means income before expenses. It is a different figure from taxable profit. Check the qualifying-income rules.
Once within MTD, keep the required digital records and send quarterly summaries for each relevant business. The summaries are cumulative from the start of the reporting year. They do not contain your entire personal tax position, and sending one does not itself create a quarterly tax-payment demand.
HMRC does not require accounting or tax adjustments before each quarterly update. Those adjustments and the other information needed for the annual return still have to be completed at the appropriate stage. Keep a review list so a matter deferred until year end is not forgotten. Read HMRC's quarterly-update guidance.
Software can organise the information, but the business facts remain essential. Review the figures you approve rather than assuming that a successful import has also settled every tax question.
Leave a useful correction note
Record what changed, why and which submission now reflects the correction. Resolve discrepancies promptly and ask support where the software's correction route is unclear. An accepted submission confirms receipt of the figures sent; it does not make an identified error correct.
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.