MTD for ITSA: Standard vs Calendar Quarters — Which Election to Make

When a client is mandated into Making Tax Digital for Income Tax, they file four quarterly updates a year. Before the first one, you choose the update periods: HMRC's standard periods, which end on 5 July, 5 October, 5 January and 5 April, or calendar periods ending 30 June, 30 September, 31 December and 31 March. The deadlines are identical either way: 7 August, 7 November, 7 February and 7 May. But the choice locks the moment you file the first update, so get it right first time. For most clients, calendar periods are the easier call.

Who has to file quarterly updates?

MTD for Income Tax is rolling out by income band. A sole trader or landlord is mandated from 6 April 2026 if their qualifying income was over £50,000, measured on their 2024/25 return. The threshold drops to over £30,000 from 6 April 2027 (measured on 2025/26), and the government has announced a further drop to over £20,000 from 6 April 2028. HMRC's eligibility guidance sets out each band.

"Qualifying income" trips people up. It is the gross income from self-employment and property — turnover before expenses, not profit — added together. A client's share of partnership profit does not count toward it. HMRC explains the test in its qualifying income guidance. So a landlord with £30,000 of rent and a £25,000 sole-trade turnover is over the £50,000 line for April 2026, even if their profit is modest.

What's the actual difference between standard and calendar periods?

Five days. That is the whole of it. HMRC's standard quarters run to the 5th of the month, mirroring the tax year. The calendar option, which HMRC calls "calendar update periods", runs to the month-end instead. Here is the year side by side:

All that moves is which transactions land in which period: a few days of sales or expenses at each month-end. Same reporting burden, same deadlines.

The deadlines really are the same either way

Worth underlining, because it kills off the thing clients fret about most. Whichever periods you pick, the submission dates are 7 August, 7 November, 7 February and 7 May. HMRC's quarterly updates guidance says so plainly: with calendar periods, "the deadline to send your update is the same."

One change catches people out: each quarterly update is now cumulative. It covers everything "from the start of the tax year to the end of the update period, not just the previous three months," as HMRC puts it. So the second update restates the year to date, not just July to October. Ignore older guides that describe three separate standalone quarters; they are out of date.

How — and when — you make the election

You set the periods in the client's MTD software, per source of income, before the first quarterly update goes in. HMRC is blunt about it: "you cannot change the update periods you're using for a tax year after you have sent a quarterly update." Miss that window and the client sits on standard periods for the whole year by default.

So this is a setup decision, not something to revisit each quarter. Make it once, at the point you onboard the client into MTD software, and note it on file alongside their other MTD settings.

So which should you choose?

For most clients, calendar periods win on one practical ground: bookkeeping is done to month-ends. Bank feeds, card statements, software reconciliations and supplier invoices all close on the 30th or 31st. Align the update period to the month-end and the figures you submit match the books, with no five-day adjustment at each quarter. Less reconciliation, fewer cut-off errors.

Standard periods rarely offer a counterbalancing advantage. The one case for keeping them is a client whose records genuinely run to the 5th, which is uncommon outside specific payroll-linked setups. Picking a house default for your MTD clients? Make it calendar periods, and set it deliberately rather than letting the standard default apply by inertia.

One thing to flag about 2026/27

For the first mandated year, 2026/27, HMRC will not charge penalty points for late quarterly updates. Its guidance states there are "no penalties for missing a quarterly update deadline for the 2026 to 2027 tax year." That is a genuine first-year easement, but a narrow one. It does not relax the obligation to keep digital records, and it does not touch the final declaration or the payment deadlines. Treat it as breathing room while clients adjust, not a reason to skip the first update on 7 August 2026.

The takeaway

Pick the update periods as part of MTD onboarding, default to calendar quarters so the figures match the books, and record the choice before the first update — because you cannot change it once that update is filed. The deadlines are fixed at 7 August, 7 November, 7 February and 7 May regardless, so the decision is purely about which one makes the bookkeeping cleaner.

This is general information, not advice — check the GOV.UK guidance, or a client's specific position with a qualified accountant, before acting. For the wider rollout, see MTD for ITSA: 2026 rollout; for the full year's dates, see the 2026 deadline calendar. Deadline reference pages: MTD ITSA quarterly update deadline and final declaration deadline.

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Sources
GOV.UK: https://www.gov.uk/guidance/check-if-youre-eligible-for-making-tax-digital-for-income-tax
GOV.UK: https://www.gov.uk/guidance/work-out-your-qualifying-income-for-making-tax-digital-for-income-tax
GOV.UK: https://www.gov.uk/guidance/use-making-tax-digital-for-income-tax/send-quarterly-updates