What is a quarterly update?
A quarterly update is a summary of your business or property income and expenses for a three-month period, sent to HMRC from your accounting software. It is a running total, not a tax calculation: no reliefs, adjustments or tax are worked out until the final declaration.
What is actually in an update
Each quarterly update contains cumulative totals of income and expenses, broken down into HMRC’s standard expense categories, for each separate business or property income source you have.
If you run a trade and let two properties, that is potentially three separate quarterly submissions: one for the self-employment and one for each property business (UK property and foreign property are treated separately).
What is not in it
No capital allowances. No private use adjustments. No stock adjustments. No accruals or prepayments if you are using the cash basis. No reliefs, no allowances, no tax calculation.
This is why the quarterly figures almost never match your final tax position, and why the estimated tax figure your software shows after a quarterly update should be treated with caution.
Clients regularly panic at the estimated tax figure after Q1. It ignores your personal allowance apportionment, your capital allowances and every relief you are entitled to.
Correcting mistakes
Because updates are cumulative, an error in Q1 is simply corrected in the next quarter. You resubmit the running total with the right figures. There is no amendment process and no penalty for getting a quarterly figure wrong, provided you submit on time.
Accuracy genuinely matters at the final declaration. Before that, timeliness matters more than precision.
This guide is general information, current at 9 November 2026. Tax rules change and depend on your circumstances. Please take advice before acting on it.