Can I File Nil Quarterly Updates Under MTD ITSA and Just Do the Tax Return at Year End?

With Making Tax Digital for Income Tax (MTD for ITSA) starting from April 2026, a lot of people are asking a very sensible question: can I just submit “nil” quarterly updates and then sort everything properly at the year end? It sounds like an easy way to keep HMRC happy without changing how you work.

The honest answer is: sometimes you can submit nil updates, but only in the right circumstances and only if they are true nil updates. If you trade or receive rental income during the quarter, filing nil just to “get it out of the way” is likely to be incorrect, and it can create compliance risk and messy corrections later.

In this guide, we’ll explain what quarterly updates are meant to contain, when nil updates are appropriate, what happens at year end, and the practical approach we recommend so you stay compliant without making life harder than it needs to be.

MTD for Income Tax: who it affects and when

MTD for ITSA is being introduced in stages. It applies to individuals who have:

• self-employment income (sole traders), and/or
• property income (UK or overseas rental)

The rollout timetable currently is:

If you’re self-employed and/or a landlord and your combined qualifying income is above the relevant threshold, you should assume you’ll need to follow the MTD process from your mandated start date.

What are “quarterly updates” under MTD ITSA, in plain English?

Quarterly updates are summaries of your income and expenses sent to HMRC using MTD-compatible software. They are not the same as your tax return, and they do not finalise your tax bill.

Think of them as regular check-ins. HMRC wants digital records kept throughout the year, and for totals to be shared periodically. Then, after the tax year ends, you submit your final figures and any adjustments.

Under MTD ITSA, the usual flow is:

1. Keep digital records of income and expenses in software.
2. Submit quarterly updates (totals for the quarter).
3. Submit an End of Period Statement (EOPS) for each business/property source (finalise the year’s trading/property figures).
4. Submit a Final Declaration (this replaces the “normal” Self Assessment tax return submission, bringing everything together including other income, reliefs, and claims).

So, quarterly updates are part of the compliance journey, but they are not the moment your tax is “done”.

So… can you file nil quarterly updates?

Yes, you can file a nil quarterly update if, for that particular quarter, there is genuinely nothing to report for that income source.

Common examples where nil might be appropriate include:

• You are seasonal and had no sales and no business expenses in that quarter.
• Your rental property was empty and you had no rental income and no allowable costs in that quarter.
• You stopped trading and had no further income or expenses (but you still need to handle cessation properly).

But here’s the key point: nil means nil. If you had income, or you had costs (even small ones), then a nil update is not accurate.

Why “nil now, sort it later” is risky in practice

It’s understandable to want to keep admin light. The trouble is that MTD is designed to encourage ongoing record keeping. If you file nil updates and then do everything at year end, you are fighting the system rather than working with it.

Here are the main risks:

1) Your updates may be incorrect (even if your year-end figures are right)

Quarterly updates are submissions to HMRC. If you had income or expenses and you submit nil, you are effectively telling HMRC there was no activity. Even though quarterly updates don’t finalise your tax, they are still part of your compliance obligations.

2) You may trigger avoidable questions or compliance checks

HMRC will have more frequent data points. If quarterly updates show repeated nils and then a large year-end adjustment, it can look odd. That doesn’t mean you’ve done anything wrong, but it can increase the chance of HMRC asking for explanations.

3) It creates a stressful year end

If you leave everything until after the tax year, you’re back in the old habit of a mad scramble. The whole point (from a practical point of view) is that quarterly updates nudge you into keeping things tidy as you go, so the finalisation is calmer.

4) Penalties will be points-based

HMRC is moving further towards a points-based penalty system for late submissions. The details can depend on the exact regime and how it applies to ITSA as it beds in, but the direction of travel is clear: missing or late submissions can build up points and lead to penalties.

If you are tempted to file nil updates just to avoid missing deadlines, it’s usually a sign you need a simpler bookkeeping routine, not a workaround.

What HMRC expects in quarterly updates (and what they don’t)

Quarterly updates are generally about totals, not perfection. HMRC isn’t expecting you to have every adjustment and accounting judgement finalised each quarter.

In practice, quarterly updates typically:

• summarise your income for the quarter, and
• summarise your allowable expenses for the quarter (usually by category), and
• are sent from software that holds your digital records.

Quarterly updates typically do not require you to:

• finalise capital allowances,
• calculate private use adjustments precisely,
• do full accounting accruals and prepayments (unless you choose to),
• finalise claims and reliefs outside the business records.

That’s why a sensible approach is to submit quarterly updates that are reasonable and based on real records, then tidy up the technical adjustments at the year end.

Nil updates vs “minimal” updates: a better way to keep it simple

If your worry is admin time, the answer is usually not nil updates. It’s minimal but accurate updates.

For many self-employed people and landlords, this can be as simple as:

• using a separate bank account for business/rental activity,
• capturing receipts as you go (photo upload),
• reconciling the bank feed weekly or monthly, and
• submitting the quarterly totals from the software.

Done this way, quarterly updates become a routine “tidy-up and send” rather than a big project.

What happens at year end under MTD ITSA?

Under the current Self Assessment system, many people think in terms of “doing the tax return”. Under MTD ITSA, year end is split into two stages:

1) End of Period Statement (EOPS)

This is where you confirm and finalise the figures for each business or property income source. It’s where you typically deal with the more technical items and adjustments, such as:

• capital allowances (if relevant),
• private use adjustments (for example, phone or vehicle),
• accounting adjustments and corrections,
• ensuring income and expenses are in the right categories.

2) Final Declaration

This is the “wrap it all up” submission, similar in outcome to submitting your Self Assessment tax return. It includes:

• other income (employment, dividends, savings interest, etc.),
• claims and reliefs,
• student loan, child benefit charge (if relevant),
• final tax calculation position.

So yes, there is still a year-end finalisation. But quarterly updates are still part of the required process if you’re in scope.

Landlords: can I file nil updates if I only get rent a few times a year?

It depends on what actually happens in the quarter.

If your tenant pays monthly, you’ll have income most quarters, so nil updates would not be correct. If you have an unusual arrangement (for example, rent paid quarterly in advance), you might have some quarters with no rent received, but you may still have costs.

Also remember: even if the property is empty, you might still have allowable expenses such as:

• letting agent fees,
• insurance,
• repairs and maintenance,
• replacement of domestic items (where the rules allow),
• utilities and council tax (if you pay them during a void),
• travel to the property (where allowable and properly recorded).

If any of those happen in the quarter, a nil update would not reflect reality.

Self-employed: what counts as “activity” in a quarter?

It’s not just invoices and sales. It’s also everyday running costs. Even in a quiet period, you might pay for things that mean you shouldn’t be filing nil, such as:

• mobile phone and internet used for work,
• software subscriptions,
• professional fees,
• insurance,
• fuel or travel costs,
• small tools and materials,
• marketing costs.

If you’re in a genuinely dormant quarter with no income and no costs, nil may be fine. But for most active businesses, there is nearly always something to record.

What if my records aren’t ready by the quarterly deadline?

This is where people start thinking about nil updates as a “placeholder”. Instead, consider one of these approaches:

Will nil quarterly updates reduce the tax you pay or delay payment?

No. Nil updates don’t reduce your tax, and they don’t change the underlying rules on when tax is due.

Quarterly updates are about reporting, not paying. Your actual tax position is finalised through the year-end submissions. If you have profits, the tax will still be due under the normal Self Assessment payment timetable (unless and until HMRC changes payment rules in future).

So if the aim is to avoid paying tax until later, nil updates won’t achieve that. The sensible focus is on keeping records accurate so your tax bill is right and there are no nasty surprises.

Common scenarios: when nil updates are (and aren’t) appropriate

What we recommend at Tax Digital (calm, compliant, and realistic)

Our aim is always to keep you compliant without making your life harder. For most self-employed people and landlords, the best approach is:

• Don’t use nil updates as a workaround. Use them only when they are genuinely true.
• Keep digital records as you go, even if it’s just bank feeds plus receipt capture.
• Submit quarterly updates that are reasonable. They don’t need to be perfect, but they should be honest and based on your records.
• Do the technical tidy-up at year end (EOPS and Final Declaration), where it belongs.

If you’re approaching April 2026 and you know you’ll be in scope (especially if your income is over £50,000), now is the time to get your software and record-keeping routine in place. It’s far less stressful to build the habit gradually than to scramble when the first quarterly deadline lands.

Quick checklist: should I file a nil quarterly update?

Key takeaways

• MTD for ITSA starts from April 2026 for those with qualifying income over £50,000, then £30,000 from April 2027, and £20,000 from April 2028.
• You can submit nil quarterly updates, but only when there is genuinely nothing to report for that quarter.
• Submitting nil updates as a placeholder and “sorting it at year end” is risky and usually creates more work later.
• A better approach is simple, regular bookkeeping and minimal but accurate quarterly submissions, with proper final adjustments at year end.