Quick answer
A quarterly update is a summary of your business income and expenses that your software sends to HMRC every three months. It isn’t a tax return, and you don’t pay tax when you send it.
What a quarterly update is
A quarterly update is a summary of your business income and expenses that your software sends to HMRC every three months. It isn’t a tax return, and you don’t pay any tax when you send it.
After each update, HMRC can show you an estimate of the tax you’re likely to owe for the year. That can help you plan, but the final figure is only settled in your final declaration.
What’s in it
your total income for the period
your expenses, split into the same categories used on the Self Assessment return
if your turnover is below the VAT registration threshold (currently £90,000), you can send your expenses as a single total instead
Your software builds the update from your digital records. You review it, then submit.
One update per business
Each income source is reported separately. A sole trader who also lets a property sends two updates each quarter: one for the trade and one for the property business. Two separate trades mean two separate updates.
Fixing mistakes
You don’t need to resubmit a quarter if you spot an error. You can correct figures in a later update or in your final declaration.
Making quarterly updates painless
use a separate bank account for your business or lettings
connect bank feeds so transactions arrive in your software automatically
categorise transactions weekly or monthly, not the night before a deadline
keep receipts digitally as you go
put all four deadlines in your calendar now