Alright. So. The UK government’s latest party trick? Quarterly tax returns. 

Yep. 

No more waiting until January to cry into your bank statements and wonder why you didn’t save more (or take advantage of the automatic transfer your banking app has when you receive certain payments). 

Instead, HMRC now wants small business owners, landlords and the self-employed to file their numbers four times a year, plus a final one at year-end. 

Cue: mass panic.

Everyone’s wailing: “More work! More fees! More stress! Less freedom!” 

But I kind of feel that the only people truly losing their sh*t here are the ones who weren’t keeping their books in order to begin with. 

If your finances currently look like a shoebox of receipts sprinkled with chaos? Sure, this will feel like torture. But if you’ve got your systems sorted? It’s actually…better.

Let me break it down.

What’s Actually Changing?

Quarterly tax returns are part of Making Tax Digital (MTD) for Income Tax Self Assessment (ITSA). The idea is simple:

• Quarterly updates: You submit a summary of your total income and expenses every three months. You are not completing a full tax return each time.
• Digital only: You’ve got to use approved accounting software (Xero, QuickBooks, FreeAgent, etc.) to keep your digital records and submit the updates. Sorry, Excel and Google Sheets warriors, your reign is over.
• Final return at year-end: A reconciliation to make sure everything adds up, which replaces your traditional annual Self Assessment.

That’s it. You’re not suddenly paying more tax. You’re just reporting more often.

When Are Quarterly Tax Returns Happening?

This isn’t a surprise party; it’s a phased rollout. 

Your income from the 2024–2025 tax year will determine when you need to start.

➡️ From April 2026: Mandatory for those with a total qualifying income over £50,000 from self-employment and/or property.

➡️ From April 2027: Mandatory for those with a total qualifying income over £30,000.

➡️ From April 2028: Mandatory for those with a total qualifying income over £20,000.

HMRC is also introducing a new, points-based penalty system for late submissions, so staying on top of deadlines will be crucial.

Why People Are Panicking

From what I can tell, people are panicking about the quarterly tax returns because it feels like “extra work” (translation: “I’ve been ignoring my books until January and now I can’t”). The thought of doing this four times a year is terrifying if you’re used to one annual panic.

There’s also the cost element, especially if you rely heavily on your accountant because they’ll now be doing four submissions, not one. This is a big one for those who hand over a shoebox of receipts every year.

Cash flow anxiety, especially when you see your tax estimate quarterly, it feels like your money is evaporating in real time. But remember, the payment schedule itself isn’t changing. This is just for reporting.

The unknown! Change is scary, and for many, the new MTD system feels like an overly complicated burden rather than a modern convenience – especially when you throw it in the mix with all the other government plans and updates.

Ops Reality Check: If this feels impossible, it’s not HMRC that’s the problem. It’s your back-end systems. Quarterly submissions are exposing how wildly unorganised a lot of businesses actually are because what do you mean you aren’t managing your finances monthly (nevermind quarterly). That’s uncomfortable, but it’s also fixable.

The Conspiracy Corner (and why it’s not that deep)

Of course, when it comes to the new quarterly tax return policy, there’s also the louder camp shouting:

“The government doesn’t want small businesses to succeed.” – and sometimes it very much does feel like that.

“They’re micromanaging us into the ground and invading our privacy.” – the wealth/tax disparity has existed forever and it’s complex and 100% not fair which is why I will always advocate for financial education. But if you can hide money over 12 months, I’m sure you’ll find a way to do it over 3.

The thing is, HMRC doesn’t care if you sell handmade candles, run a digital agency, or flip houses. They care that tax gets paid, on time, without mistakes. 

Making Tax Digital isn’t an evil illuminati plot, it’s an efficiency drive. Quarterly tax updates mean fewer errors, fewer missed payments, and fewer financial cliff-edges.

Yes, it’s annoying to be nudged into using software and paying those costs.

Yes, it feels invasive if you’ve always thought of your business finances as private territory. 

But in practice, HMRC isn’t poring over your Amazon Prime subscriptions or your Pret receipts. They’re running totals. The software does the legwork, and your job is just to click submit.

Bottom line: this isn’t surveillance; it’s standardisation…

And maybe a little surveillance!

Why Quarterly Tax Returns Are Actually Better (if you get your act together)

I am very much a silver lining, best case scenario kinda gal, so when I read this update, my initial thoughts were:

• No giant tax bomb at year-end: When your tax bill is a rolling estimate, you’re less likely to be blindsided. Smaller, regular chunks are easier to swallow.
• Better visibility: You’ll know how your business is actually performing every quarter, not just once a year (which FYI team, we should be doing this anyway). This allows for smarter business decisions and better financial planning.
• Less chaos: Keeping on top of your books means you’re not scrambling at the last minute. It’s less about HMRC being evil overlords and more about forcing business owners to be grown-ups with their finances. Painful? Maybe. Necessary? Apparently so!

What a Quarterly Tax Submission Looks Like 

(Spoiler: It’s Boringly Simple)

Here’s all you’re doing each quarter:

1. Total income: What you brought in.
2. Total expenses: What you spent (on allowable things).
3. Adjustments: If relevant (capital allowances, etc.).
4. Press “submit”: Your software does the rest.

HMRC then gives you an estimate of your tax bill so you can plan ahead. At the end of the tax year, you do a final tidy-up return (the reconciliation).

That’s it. 

Not exactly the seven circles of admin hell people are making it out to be.

How to Get Ready Without Losing Your Mind

Think of quarterly tax returns as a systems audit. If you can’t confidently click “submit” each quarter without breaking into a sweat, that’s your signal to strengthen your operations.

Here’s the minimum viable setup you need now:

1. Pick your software weapon of choice: It doesn’t matter which one, just pick one and stick with it. They all talk to HMRC.

2. Start reconciling monthly: Don’t wait until quarter-end to clear three months of chaos. Match your transactions every few weeks so the quarterlies are just a button click.

3. Create a tax buffer account: Open a separate savings account and skim off a percentage of income each month (20–30% depending on your bracket). When the quarterly estimate lands, you’ll already have the money waiting.

These aren’t just finance tips — they’re operational hygiene. Do this, and tax reporting becomes just another routine system, not a quarterly heart attack.

Using Quarterly Submissions As an Advantage

This change doesn’t just make HMRC happy. It gives *you* visibility. Quarterly reporting is basically free data on how your business is performing. And things you should be actively doing as a business owner already.

You can:

• Spot when your margins are shrinking before it’s a crisis.
• Adjust pricing in real time if your costs are climbing.
• Track growth quarter by quarter instead of waiting a whole year to realise you flatlined.
• Make quicker decisions regarding development because you’re not waiting to see exactly how much you need to spend to reduce your tax bill.

Accountant or DIY?

If you love spreadsheets less than you love dental surgery, pay your accountant to handle the submissions. Just know it’ll cost more because you’re asking them to do four little jobs instead of one big one.

If you’re more hands-on, this is your chance to save money: set up your software, reconcile often, and let your accountant handle the year-end tidy-up instead of every quarterly click.

Though really, monthly expenses are copy and paste with the odd exception here and there, so it’s not like your going to be spending hours figuring it all out.

The Bottom Line

Quarterly tax submissions aren’t the apocalypse.

They’re a systems test. 

If you can’t handle reporting four times a year, you don’t have a tax problem, you have an operations problem.

So instead of spiralling, take it as your cue to finally:

• Get your books digital.
• Keep them updated regularly.
• Stop treating your tax bill like a surprise party you never wanted.
• Sort your systems and ops out (even if you are a solo-trader).

Fix your ops, and quarterly tax submissions won’t just feel manageable, they’ll give you an edge. Because the businesses with tight systems don’t just survive government changes. They thrive through them.

Cheesy, I know! But it’s true.

Anyways, if you have any questions about ops, systems and processes, I’m here for you! Just drop me a message.

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