Correcting an MTD Quarterly Update Mistake

Sending your first Making Tax Digital quarterly update can feel like a major milestone. But what happens if you later notice that an invoice was missing, an expense was entered twice or a transaction was put in the wrong category?

The important thing is not to panic. A quarterly update is a summary of the digital records held in your software. It is not a final tax return, and HMRC’s system allows records to be corrected as the year progresses.

The right response is usually to correct the underlying digital record rather than trying to alter a figure separately from your bookkeeping.

Common Mistakes You May Find After Submitting

Even careful bookkeeping can contain errors. Common examples include:

a sales invoice or rent payment that was left out
an expense entered twice
a personal payment recorded as a business expense
an expense placed in the wrong category
a refund recorded as new income
an incorrect date or amount
an estimated transaction that has now been confirmed
a transaction missed because a bank feed stopped updating

Finding one of these problems does not automatically mean that your whole quarterly update must be submitted again.

Correct the Digital Record First

HMRC guidance says that you may need to change, delete or create a digital record to put an error right.

For example:

If an invoice was missing, add it to your records.
If an expense was duplicated, remove the duplicate entry.
If the amount was wrong, amend it to the correct amount.
If the category was wrong, move the transaction to the correct category.

If your bookkeeping and MTD submissions are handled in one software package, make the correction there. If you keep records in a spreadsheet and use bridging software, correct the original spreadsheet record and preserve the digital link to the software used for submission.

Avoid making a separate adjustment in the submission software while leaving the original bookkeeping error untouched. Your digital records should remain consistent with the information sent to HMRC.

Do You Need to Resend the Previous Quarterly Update?

In most cases, no.

HMRC explains that each quarterly update is cumulative. This means it covers the period from the beginning of the tax year to the end of the relevant update period, rather than reporting only the latest three months in isolation.

If you correct a record during the tax year, the correction will normally be included when you send your next quarterly update. You do not usually need to go back and resend each earlier update separately.

For example, imagine you submitted your first update and later found a £600 expense that should not have been recorded. You remove the incorrect entry from your digital records. When the next cumulative update is sent, the corrected totals will be included automatically.

What if You Find the Mistake Before the Next Update?

Correct it as soon as possible and keep any supporting evidence, such as the invoice, receipt, bank statement or credit note.

You do not need to wait until the next deadline to clean up your records. Correcting the entry promptly helps keep your bookkeeping accurate and makes the next review easier.

If you are unsure about the correct treatment, flag the transaction and ask your accountant. Guessing can create a second error that later needs to be untangled.

What if the Fourth Quarterly Update Has Already Been Sent?

The process is slightly different after the fourth quarterly update because there is no later quarterly update to carry the correction.

HMRC says you can correct the digital record and resend the fourth update. In some cases, an accountant may instead adjust the relevant category total in the software while ensuring that the underlying digital records are also corrected.

Any errors must be dealt with before you complete and submit your annual tax return through MTD-compatible software.

This end-of-year stage is also when tax and accounting adjustments are made. Quarterly updates do not normally require you to make all the adjustments needed to calculate your final taxable profit.

What if the Problem Is With the Software?

Sometimes the record itself is correct, but the software is not displaying, calculating or submitting the information as expected.

Start by checking:

whether the software is connected to the correct HMRC account
whether the bank feed or spreadsheet link is still working
whether the transaction dates fall inside the correct period
whether all records have synchronised before submission
whether the software has issued an error message

HMRC’s current guidance says that software problems should normally be raised with the software provider first. If the provider cannot resolve an issue that prevents you from checking the calculation or submitting the annual tax return, you may then need to contact HMRC.

Will a Correction Automatically Mean a Penalty?

Correcting a genuine bookkeeping mistake is not the same as deliberately providing incorrect information.

The sensible approach is to correct an error as soon as you become aware of it, retain the supporting documents and make sure the revised information flows through the proper digital process.

Late-submission penalties are a separate issue from correcting the contents of an update. HMRC has confirmed that it will not apply penalty points for late quarterly updates during the 2026/27 tax year, although the updates still need to be completed before the annual tax return can be submitted.

A Simple Correction Checklist

If you discover a mistake after sending an update:

Identify exactly which transaction or record is wrong.
Check the invoice, receipt, statement or other evidence.
Correct, delete or add the digital record in the system where it is maintained.
Make sure any connected or bridging software receives the corrected information digitally.
Keep a short note explaining what was changed and why.
Check that the revised total will be included in the next cumulative update.
Ask your accountant if the treatment is unclear or the fourth update has already been sent.

How AA&R Certified Accountants Can Help

A small error is often straightforward to correct when it is found early. Problems become more difficult when records are left unreconciled or changes are made in one system but not another.

AA&R Certified Accountants can review your digital records, identify missing or duplicated transactions, correct bookkeeping categories and make sure the right information flows into your next MTD quarterly update.

We can also help if you use spreadsheets and bridging software, have more than one income source or are unsure whether a correction needs additional action at the end of the tax year.

If something does not look right after your quarterly update, contact AA&R Certified Accountants for practical, plain-English support.

Related reading:Your First MTD Quarterly Update