The MTD quarterly countdown: A practice guide

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The first quarterly deadline is nearly here. Here is exactly what to do over the next few weeks to get your clients filed, keep everyone calm, and come out with a routine you can run on repeat. The post The MTD quarterly countdown: A practice guide appeared first on Sage Advice UK.

The MTD quarterly countdown: A practice guide

The first quarterly deadline is nearly here. Here is exactly what to do over the next few weeks to get your clients filed, keep everyone calm, and come out with a routine you can run on repeat.

Published 3 July, 2026 min read

Keir Thomas-Bryant

Making Tax Digital (MTD) was first announced back in 2015, with Income Tax the first planned inclusion.

History shows things didn’t run quite to plan.

But now, here we are over a decade later: the clock is ticking down to 7 August, the first-ever quarterly update deadline for Income Tax.

For most accountancy or bookkeeping practices, this will be the first time real client data has run through the whole Making Tax Digital process end to end.

There may be challenges. But the focus must be on getting that first batch of updates out of the door. That’s what this article’s all about. No history lessons, no technical explainers. Just focusing on solving for the here and now.

Here’s what we discuss:

Triage your client list right now

Before you touch a single submission, get a clear picture of where every in-scope client stands.

You will have two broad categories, of course:

Do it with me: Clients who have their own software and are doing their own quarterly updates (but who are anticipating your help at year end). These will need reminding of the quarterly update obligation, and perhaps reassuring, too, given this is the first time.
Do it for me: Clients that are expecting you to do it all for them—from creating digital records, to creating and submitting the quarterly updates. These clients may need chasing and reassuring that you’re taking care of it.

It’s the latter we’re most focussed on in this article, but we do provide an email template for the former, below.

Pull your list of clients mandated from April 2026 and sort them into three buckets according to the basics of the RAG status system:

Ready to file (GREEN): Records complete and in your software
Data still landing (AMBER): Some records in, chasing the rest
Nothing yet (RED): Radio silence

Then review and file every green client today, if that’s in your purview (e.g. they aren’t doing it themselves). There is nothing to gain by holding these clients, and clearing them off your desk frees the team to focus where it counts.

Remember that this is the first time HMRC has processed what will be around a million taxpayer quarterly updates (with many taxpayers submitting multiple updates, of course). All of us have confidence nothing bad will happen with HMRC’s systems but, in the same breath, it isn’t being overly cynical to get as much done as possible ahead of the deadline, before the systems will become strained.

Now work the amber list hardest: these are the ones a single phone call or scan-in session can push over the line.

The red list you triage by risk—biggest liabilities and least time first.

If you are using Sage for Accountants, the MTD for Income Tax Agent that’s part of the Sage Copilot AI can do this segmentation for you automatically, grouping clients by complexity and readiness so you are not building the list by hand. More on that below.

Get the missing data—in the fastest way possible

The bottleneck is always getting the records out of the clients.

For the disorganised ones (the classic landlord or side-hustler with a carrier bag of statements), the fastest route from raw paperwork to filed figures is scan-and-reconcile.

Use a capture tool to digitise everything in one go. Data entry automation apps like AutoEntry lets clients photograph, scan or email their invoices, receipts and bank statements, then extracts the data for you instead of anyone re-keying it—which also ticks the digital-records requirement.

You might even be able to get by just with the bank statements if the client hasn’t made cash purchases or accepted cash payments. And for clients with no ledger or accounting software at all, its AccountsPrep add-on takes those captured statements, lets you fast-code them to a chart of accounts and reconcile against the bank, and outputs a tidy set of figures.

Those using AccountsPrep say it can turn what used to be a full day’s work per client into an hour or so. For MTD, data entry software like this is not just a nice-to-have. It’s essential.

Lean on light-touch reconciliation. You no longer need to match every line by hand: let the software auto-match the bulk and have your team review the exceptions and anything that looks off.

That’s the only realistic way to get through the volume without burning people out.

The client email templates for sending today

Clients will either be DIYing the quarterly update, or will be relying on you (hopefully having arranged to do so in advance, of course).

Email both types of client with reminders. Here are some templates you can insert straight into your email software. If the client uses calendar quarter elections, you should obviously edit where required (although the deadline remains 7 August).

Clients you’re servicing only for year end

Subject: Your first Making Tax Digital update is due by 7 August

Hi [first name],

A friendly heads-up as the first Making Tax Digital (MTD) for Income Tax deadline comes round. As we’ve arranged, you will handle your own quarterly updates through your accounting software, so here’s a short guide to keep it simple and stress-free—plus a reminder that we’re on hand if you need us.

Your first quarterly update is due to HMRC by 7 August 2026. It covers your income and expenses for 6 April to 5 July, and you submit it through your MTD-compatible software, not the HMRC website.

A few things worth knowing:

It’s not a tax bill. A quarterly update is just a summary of your income and expenses for the period. There’s nothing to pay—your tax is still due on [31 July/31 January—edit to fit].
It doesn’t need to be perfect. The updates are cumulative, so anything that changes is tidied up automatically in your next update and finalised at year-end. Filing on time matters more than getting every penny exact.
Don’t leave it to the last day. This is the first time millions of people are filing, so HMRC’s systems may be busy close to the deadline. Getting yours in a few days early takes the pressure off.

To submit, in short:

Check your software is connected to HMRC and shows you as active for MTD for Income Tax, and not connected to the old Self Assessment route any longer.
Make sure every transaction from 6 April to 5 July is entered and categorised, with nothing left uncategorised.
Review the quarterly summary your software produces, sense-checking any large entries.
Submit, and save the confirmation from HMRC.

If you’d rather not do it alone, or you hit anything you’re unsure about, just reply to this email or give us a call. We’re happy to check your figures before you submit, take the whole thing off your hands, or simply be on standby for your year-end—whatever’s easiest for you.

[Your name]
[Practice name]

Clients you’re servicing fully

Don’t wait for stragglers to come to you. Go to them, today, with one clear ask and one clear deadline.

Keep it warm and specific. A firm, friendly nudge with a real cut-off gets records in far faster than a vague chaser.

Subject: Urgent action needed—your records for the 7 August tax deadline

Hi [First name],

Your first quarterly update under Making Tax Digital for Income Tax is due to HMRC by 7 August, and we need your business income and expenditure for 6 April to 5 July this year (2026).

Could you send us the following by [date—give yourself a buffer before 7 August]:

Business bank statements for the period—these can usually be exported from your mobile banking app.
Any sales invoices and expense receipts not already with us
[Anything client-specific e.g. records for online sales]

The easiest way is to snap or scan them and send them over — [one line on how: upload here / use WhatsApp / reply to this email / use the app we set up].

Don’t worry about sorting or categorising anything. We will do all of that. If it’s easier to talk it through, just let me know a good time for a quick call.

Thanks—this won’t take long and we will take it from here.

[Your name]

For clients who are worried rather than simply late, a short reassurance goes a long way.

Build a submission rota for your team

With four deadlines a year now instead of one, the practices coping best are running submissions like a production line rather than a scramble.

Set up a simple rota for the next few weeks around four roles—even if one person wears more than one hat:

Capture: Getting records in and scanned (chasing clients, managing accounts in a tool like AutoEntry).
Code and reconcile: Turning raw data into coded, reconciled figures using tools like AccountsPrep.
Review (optional): A second pair of eyes sense-checking before anything goes to HMRC. This can be spot-checking if resource is limited.
Submit: Filing through your software, saving the confirmation, and notifying the client (if that’s part of your workflow).

Work backwards from 7 August and file continuously: as each client clears review, submit them.

A daily five-minute stand-up meeting in the morning for the team—who’s green, who’s stuck, what’s blocking—keeps the whole book moving and stops anyone slipping through the cracks.

One practical heads-up: 7 August lands in school-holiday and peak holiday season, so map the rota against who is actually in the office.

Let the software do the heavy lifting

You don’t have to carry the admin load by hand. This is exactly what the new wave of AI tooling is built for, and this summer window is the moment to put it to work.

Sage’s MTD for Income Tax Agent, built on Sage Copilot, is designed for precisely this crunch. From within Sage for Accountants it can automatically segment your clients by complexity, set up the quarterly update jobs, chase missing documents across different channels, generate the submission report for you to check, and flag anything that looks wrong before it goes anywhere.

Crucially it’s configurable and keeps you in control: you decide which tasks it does automatically and which a human signs off, so it is assisted, not autonomous.

It can cut the admin around quarterly updates by up to 80% and hand back around five hours a week—time you can put into the clients who actually need advice.

The principle holds whatever tools you use: let the software do the repetitive, mechanical work—segmenting, chasing, extracting, pre-filling—and keep your people for the judgement calls, the exceptions and the final review. Used that way, this first quarter becomes far more manageable, and you finish it with a workflow you can run almost on autopilot four times a year.

What if a client just won’t make the quarterly update deadline?

Some clients on the red list will stay red, however hard you chase. And it’s not down to you to panic.

Of course, the fact is that HMRC has confirmed a soft landing for this first year. No late submission penalty points will be issued for quarterly updates during 2026/27 for this first mandated group. A client who genuinely can’t make 7 August faces no point and no fine for that update.

So the rule for the red list is simple: keep chasing, but don’t burn team hours forcing guesswork through on deadline day. In the soft-landing year, an accurate update a few days late is a recoverable, low-drama outcome—just don’t let one missed quarter quietly become a client who has fallen behind for good.

If that sounds harsh, think back to 2019. When VAT went digital, practices up and down the country discovered the same thing: a small tail of clients who wouldn’t or couldn’t make the move, no matter how much hand-holding was on offer.

The refrain on the professional forums at the time became something of a mantra—you don’t have to act for anyone you don’t want to. Many practices used MTD for VAT as the honest prompt to reprice difficult clients, redefine the service—or just part ways professionally. Few regretted it, and most wished they’d done it sooner.

MTD for Income Tax will surface the same tail, only larger. And this is the moment to remember where the responsibility actually sits: the tax obligation belongs to the taxpayer. The relationship that matters legally is between your client and HMRC. You provide services under an engagement letter. You are not the guarantor of their compliance, and a client who won’t engage is not your failing.

Have the honest conversation. Set out plainly what quarterly compliance requires from them, what it costs with you doing it, and what happens if they do nothing.

Disengage properly where it’s not working. If a client won’t engage and won’t pay for the level of service their situation demands, the professional route is a clear written disengagement: what you will and won’t complete, a firm end date, and full cooperation with whoever takes over. Do it well clear of the next deadline, put it in writing, and keep a record of the advice you gave. Then move on with a clear conscience.

After 7 August: Keep the momentum

Don’t let the machine stop when the last quarter-one update goes in. Quarter two is already underway—it covers 6 July to 5 October, with a deadline of 7 November—which means the records for it are landing in inboxes right now.

Three things to do in the week after the deadline:

Hold a short wash-up meeting: What slowed us down, which clients need moving onto capture tools, and what should the rota look like for November — fewer summer holidays, but you’ll be running into year-end planning season.
Roll the red list forward: Move quarter one’s stragglers straight onto the quarter-two chase list, with earlier and firmer nudges this time.
Set the standing rhythm: Ask clients for records monthly, not quarterly. Clients who send little and often turn every future deadline into a non-event.

File the first batch, learn, and go again. By quarter three, this is just how the practice runs.

Plus, you can use quarter one as your pricing dry run. Did you make money?

Buried inside the deadline scramble is the most valuable dataset your practice will collect all year—how long quarterly servicing actually takes, client by client.

Ask the team to log time honestly this quarter against three buckets—chasing and capture, coding and reconciliation, review and submission—for each client. Nothing fancy: a shared spreadsheet does the job.

Then, in mid-August, read it. You’ll see immediately which clients are profitable at current fees across four cycles a year, which ones need moving onto capture tools before quarter two, and which need a fee conversation.

Practices that reprice on real numbers have that conversation with confidence; practices that don’t simply absorb the cost, four times a year. Start the timesheet today, before the first submission goes out of the door.

Final thoughts

The first quarterly update feels like a mountain because it is the first. Really it is the same core job you have always done—get the records, tidy the numbers, file them—on a new rhythm. Triage your book, get the data in with the right tools, keep clients calm, and file early and often.

Do that this quarter and you are not just clearing 7 August; you are building the routine that makes the next three, and every year after, genuinely easy. And keep the bigger picture in mind: four touchpoints a year instead of one is four chances to have a proper conversation with each client. That is not just more compliance — it is more opportunity.

Frequently asked questions

Can I file a quarterly update if I don’t have all a client’s records yet?

Here’s the thing: it’s better to file on time with your best figures than to miss the deadline chasing perfection. Quarterly updates are cumulative, so each one is a running year-to-date total that overwrites the last. Anything that changes is corrected automatically in the next quarter, and everything is finalised at the digital tax return. File what you have, then tidy up.

Will my client be fined for a late quarterly update this year?

Not with penalty points. Clients mandated from April 2026 get a soft landing, so there are no late-submission penalty points on their first year of quarterly updates. The important caveat: that relief does not extend to late payment or to the digital tax return, both of which follow the normal penalty rules — so keep filing and paying on time.

What’s the fastest way to get a disorganised client ready to file?

Scan-and-reconcile. Use a capture tool such as AutoEntry to digitise the client’s bank statements, along with the invoices and receipts in one pass (which also satisfies the digital-records rule). Bank statements on their own will do it provided the individual runs everything through their bank (e.g. they don’t make cash purchases or take cash payments). Then use AccountsPrep to fast-code and reconcile those transactions into a clean set of figures. Let the software auto-match the bulk and only review the exceptions—and let Sage’s MTD for Income Tax Agent chase outstanding documents and pre-build the submission for your review.

E-Book: MTD for Income Tax—The final countdown playbook for practices

Accountants and bookkeepers still have time to create a repeatable plan for MTD success. This e-Book explains how, via a fast-track mindset, and a 5-phase countdown to April 2026—and beyond.

Get Making Tax Digital: The Final Countdown Playbook