New Quarterly MTD Updates for Medium-Sized London Businesses – What This Means for Your Business
- bes Accountancy Services
- Jun 30
- 5 min read
Updated: Jul 18
Making Tax Digital (MTD) is transforming the UK tax landscape once again, and the latest quarterly MTD updates are set to significantly affect how medium-sized businesses operate across London and beyond. For businesses earning over £50,000, these changes are not just regulatory – they’re operational. Whether you run a growing SME in Camden, manage a property portfolio in Southwark, or are a self-employed contractor in the City, it’s time to prepare.
In this guide, we’ll walk you through everything medium-sized businesses need to know about the latest quarterly MTD updates, how they impact everyday business operations, and the practical changes you can implement today to stay compliant.
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Understanding the New Quarterly MTD Updates
Quarterly MTD updates are the latest stage in HMRC’s broader Making Tax Digital for London businesses and the rest of the UK. From April 2026, all unincorporated businesses and landlords earning over £50,000 annually must submit digital income tax updates every quarter via MTD-compliant software. This replaces the single annual Self-Assessment return with four updates and a final declaration.
These changes are not limited to tax professionals or accountants – they’re designed to make tax obligations more frequent, transparent, and real-time. But for busy business owners, that also means adjusting current systems, workflows, and responsibilities.
Key Elements of the Update:
Quarterly digital updates to HMRC
Final end-of-period statement (EOPS)
MTD-compliant software required
Applies to income tax (not just VAT)
Making Tax Digital for London Businesses: Who Is Affected?
This phase specifically targets self-employed individuals, partnerships, and landlords earning over the £50,000 threshold. From April 2027, that threshold drops to £30,000 – making it critical for London’s small and medium-sized enterprises to prepare now.
Affected sectors include:
Builders, renovators, and property developers
Freelancers and consultants
Retailers and independent shop owners
Landlords and property managers
Health, wellness, and hospitality services
If your business has already adapted to MTD for VAT, you may have a head start. But income tax introduces new data formats and reporting expectations.
How the Quarterly MTD Updates Will Affect Your Daily Operations
Quarterly MTD updates fundamentally change how businesses manage their accounting. Instead of a once-a-year scramble to compile records, you’ll be expected to maintain digital books consistently and submit them every three months.
What Changes Immediately:
Real-Time Record-Keeping You must record income and expenses as they occur using digital software. Paper records will no longer suffice.
Quarterly Deadlines Four fixed deadlines per year will replace your annual self-assessment. These updates must reflect real financial activity, not estimates.
Final Declaration Instead of Self-Assessment After your final quarterly update, you’ll confirm and adjust any additional income in your EOPS.
Software-First Mindset Manual spreadsheets are no longer accepted unless integrated with bridging software. Cloud-based tools like Xero and QuickBooks are now essential.
Want to dive deeper into accounting for businesses?
Read our related blog, where we provide a full guide to submitting your File Your 2024/25 Tax Return Early.
Tangible Steps to Prepare Now
For many London businesses, the change feels daunting. But the transition can be smooth – provided it’s approached proactively.
Step 1: Assess Your Current System
Evaluate whether your accounting system is MTD-compliant. Are you still using manual spreadsheets? Do you have a digital process for categorising income and expenses?
Step 2: Choose the Right Software
BES Accountancy recommends trusted MTD software for small businesses like Xero and QuickBooks, both of which offer features tailored for quarterly MTD updates.
Step 3: Update Internal Processes
Train your team to input transactions in real-time. Implement monthly bookkeeping cycles. Ensure that your payroll, invoicing, and VAT submissions are also integrated.
Step 4: Appoint a Dedicated Advisor
A Making Tax Digital accountant in London like BES can offer quarterly reviews, submissions, and peace of mind.
Why Work with BES Accountancy?
Founded in 2020, BES Accountancy is a trusted name in digital tax transformation. Based in London and serving clients across the UK, we help medium-sized businesses navigate MTD with ease and confidence.
What We Offer:
Full accountancy services: Bookkeeping, Payroll, VAT, Financial Accounting, Tax Return Services
Expert guidance on MTD for income tax 2025
Certified in Xero and QuickBooks
Tailored support for sole traders, partnerships, and SMEs
Personalised setup and training sessions for MTD-compliant software
At BES, we prioritise Availability, Efficiency, and Trust, making your transition to Making Tax Digital as seamless as possible.
Let bes accountancy services save you time and money by handling your accounting.
Industry Spotlight: Construction Businesses and MTD
The construction sector is especially impacted due to high-volume transactions and subcontractor payments. Accurate quarterly reporting is essential to avoid penalties and cash flow mismanagement. BES Accountancy provides specialist support for builders and developers navigating digital compliance.
Key Benefits of Early MTD Compliance
Real-time financial insight
Improved cash flow management
Fewer year-end surprises
Greater accuracy and fewer penalties
Stronger decision-making tools
Being MTD-ready isn’t just about ticking a box for HMRC. It’s about positioning your business for growth in an increasingly digital economy.
Stay Connected with BES
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Final Thoughts
MTD is here to stay, and the latest quarterly MTD updates are a sign of HMRC’s push towards a more transparent and efficient tax system. By acting now, London businesses can future-proof their operations, reduce the risk of penalties, and gain real-time insight into their financial health.
Let BES Accountancy be your guide on the digital tax journey.
Book your free consultation now -
Call 07816264205 or visit us at our London office for a free consultation.
Frequently Asked Questions (FAQ)
1. What are quarterly MTD updates?
Quarterly MTD updates are submissions made every three months to HMRC under the Making Tax Digital for Income Tax Self Assessment (ITSA) initiative. They replace the annual Self-Assessment with more frequent digital reporting.
2. When do quarterly MTD updates become mandatory?
From April 2026, they will be mandatory for self-employed individuals and landlords earning over £50,000, with expansion to those earning over £30,000 from April 2027.
3. Do I need MTD-compliant software?
Yes. HMRC requires digital submissions through approved MTD-compatible software. BES Accountancy can help you choose, implement, and manage tools like Xero or QuickBooks.
4. How often do I need to submit updates?
You’ll need to submit four updates per year, plus a final declaration. These updates are based on actual figures, not estimates.
5. Can BES Accountancy handle MTD submissions on my behalf?
Absolutely. We offer full MTD-compliant services, including quarterly bookkeeping, submissions, and advisory support across the UK.
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