Your MTD Quarterly Update Form Explained: Field by Field

What This Post Is Actually For

You have filed a quarterly update before. You know the basics. But when you are staring at the form fields, you still get a nagging feeling - does this number go here or there? Is this the right box for mileage? Should that expense be split? This post walks through each section of the HMRC quarterly update form field by field, in plain English, so you know exactly what goes where and why.

This is not a checklist of things to do before you file (that is covered in Before You File: Is Your Quarterly Update Actually Ready?). This is a direct guide to the form itself - what each section is asking, which real transactions belong there, and how to spot a mistake before you hit submit.

The Big Picture First: What the Form Is Collecting

It helps to think of MTD figures in three groups:

1. Income - what money came in from your trade or property during the quarter
2. Expenses - what you spent in running that business or property
3. Allowances and adjustments - most of these (capital allowances, the trading and property allowances, losses) are annual adjustments made before the final declaration, not part of each quarterly update

The form does not calculate your tax bill. It collects the raw figures so HMRC can produce a running estimate. The final calculation happens later at the final declaration. So do not panic if the in-year estimate looks odd - it is just a projection based on incomplete information.

Also worth noting: if you are both a sole trader and a landlord, the two income sources have separate forms. They do not mix. Self-employment income goes in one set of fields; property income goes in another. Keep them apart.

Section 1: Income Fields

Turnover / Gross Income

This is the total money your business received during the quarter - before you deduct anything. Not profit. Not what landed in your bank after costs. The full amount invoiced and paid, or cash received if you work on a cash basis.

For most sole traders, this is straightforward: add up all payments received from clients or customers during the quarter.

For landlords, this is total rent received during the quarter, regardless of what the rent is used to pay. You do not subtract the mortgage payment here. You do not subtract repairs. You report gross rent first, then deduct expenses below.

Common mistakes here:

• Reporting net amounts (what hit your bank after fees or platform deductions) instead of gross
• Forgetting cash payments or payments received in kind
• Including VAT in the figure (if you are VAT registered, report the net amount excluding VAT)
• Including a deposit paid by a tenant - a deposit is not income unless you keep part of it

If you are unsure what counts as qualifying income in the first place, this plain-English guide to qualifying income covers it in detail.

Other Business Income (Sole Traders)

Some versions of the form include a separate field for "other income" from the same business - for example, a grant received, a refund from a supplier that counts as income, or money received for an asset you sold as part of the trade. If your software shows this field, do not ignore it. Check whether anything you received during the quarter belongs here rather than in your main turnover field.

Section 2: Expense Fields

This is where most of the confusion happens. The form breaks expenses into categories, and HMRC expects you to put each figure in the right bucket. The categories below are the standard ones you will see in most MTD-compatible software, including bridging tools.

Cost of Goods Sold (or Cost of Sales)

This applies mainly to businesses that buy stock or materials to then sell or use in a job. A builder buying timber, a florist buying flowers, a retailer buying wholesale goods - those costs go here.

It does not apply to most freelancers or service businesses. If you do not buy stock or raw materials, leave this blank or enter zero.

Construction Industry Costs (CIS)

This field is specific to construction businesses that make payments to subcontractors under the Construction Industry Scheme. If that applies to you, the amounts you paid to subcontractors go here. If it does not apply, ignore this field.

Staff Costs

Any wages, salaries, or subcontractor costs you paid during the quarter. If you have employees, their gross pay plus employer's National Insurance contributions and pension contributions go here. If you pay a subcontractor who is not a CIS worker, their invoices go here too.

Your own drawings or salary as a sole trader do not go here. You cannot pay yourself as an employee of your own sole trader business.

Premises and Occupancy Costs

Costs of the physical space where you work. This includes:

• Rent for business premises
• Business rates
• Utility bills for the premises
• Buildings insurance for the business premises
• Cleaning and maintenance of the premises

If you work from home, the home office calculation goes in a different place - see the allowances section below. Do not put your home broadband bill or personal utility bills in this field.

Repairs and Maintenance

For sole traders, this covers repairs to equipment, vehicles, and tools used in the business. A new part for a machine, a repair to a business van - those go here.

For landlords, repairs to the rental property go here. Repainting, fixing a boiler, replacing a broken window - all allowable repairs. The key rule: a repair restores something to its original state. Improving or upgrading something is a capital cost, not a repair, and cannot be deducted here. If you are unsure where a landlord repair sits, this guide to repairs versus capital works explains the distinction.

General Administrative Expenses

The catch-all category for day-to-day running costs that do not fit neatly elsewhere. Typical examples:

• Office supplies (paper, printer ink, postage)
• Software subscriptions used in the business
• Bank charges and transaction fees
• Professional indemnity insurance
• Bookkeeping or accountancy fees
• Advertising and marketing costs

If you have a cost that does not obviously fit another category, this is usually where it goes. But do not use it as a dumping ground - HMRC expects costs to be categorised correctly. If something clearly belongs in staff costs or premises, put it there.

Travel and Subsistence

Business travel costs - fuel, train tickets, parking, congestion charges, taxis to client meetings. Also includes meals and accommodation when you are travelling overnight for business.

Commuting costs do not count. The journey from your home to your regular workplace is not allowable. Only travel to a temporary workplace, a client site, or a different location from your usual base qualifies.

If you use your own car for business, you have two options: claim actual costs (fuel, insurance, servicing) split by business proportion, or use HMRC's simplified mileage rates. You cannot mix the two methods for the same vehicle. This guide on mileage allowances in MTD explains the simplified rates approach.

Advertising and Marketing

Some software versions break this out separately from admin. If you see a dedicated advertising field, put your website costs, social media ads, leaflets, and any other promotional spend here rather than in general admin.

Entertainment

Almost nothing goes here. Client entertainment is specifically not allowable as a business expense in the UK. Taking a client out for dinner is not deductible. Staff entertainment for genuine employees (not yourself) has limited allowances but is complex. If you are unsure, do not include entertainment costs in your quarterly update - check first.

Interest on Loans (Sole Traders)

Interest on a business loan or business overdraft used wholly for the business can go here. Not the capital repayment - just the interest portion.

If you used a personal loan partly for the business, you can only claim the business proportion. Mixed-use loans are covered in this guide on claiming the business percentage.

Finance Costs (Landlords)

Landlords have a separate treatment for mortgage interest. Since the tax relief restriction rules came in, you cannot deduct mortgage interest directly from rental income as an expense. Instead, you get a 20% tax credit at the final declaration stage. The field in the quarterly update form is where you record the interest you paid - it is captured now but the relief is applied later. If you want to understand this fully, this post on landlord mortgage interest in MTD walks through exactly how it works.

Depreciation

Do not put depreciation figures here if you calculate them for accounting purposes. HMRC does not accept accounting depreciation as a tax deduction. Instead, you claim capital allowances - which are handled differently (usually at the final declaration, not in the quarterly update).

Professional Fees

Accountancy fees, legal fees for business contracts, surveyor fees for rental properties - these are allowable. Legal costs for purchasing a property or a business asset are capital in nature and not deductible here. A useful question: is this fee for running the business, or for acquiring something? Running costs go here; acquisition costs do not.

Section 3: Allowances and Adjustments

This section is separate from expenses for a reason. These are not costs you paid out - they are deductions calculated using HMRC-approved methods, or adjustments to correct for something counted elsewhere. Most are entered once a year as annual adjustments before your final declaration, rather than in each quarterly update. Landlords' residential finance costs and rent-a-room income are reported in the quarterly property update.

Trading Allowance (Sole Traders Only)

If your gross income from self-employment is £1,000 or less in the tax year, you can use the trading allowance instead of claiming actual expenses. You cannot use both - it is one or the other. If your income is above £1,000, you can still deduct the £1,000 allowance instead of your actual expenses, which helps if your expenses are lower than £1,000. This post on the trading allowance in MTD covers when it applies and when it does not.

Property Allowance (Landlords Only)

Similar principle to the trading allowance but for property income. If your gross rental income is £1,000 or less in the tax year, it's tax-free. Above that, you can deduct the £1,000 allowance instead of your actual expenses. Again, it is either the allowance or actual expenses - not both.

Use of Home as Office (Sole Traders)

If you work from home, you can claim a proportion of household costs - things like heating, electricity, and broadband. You need to work out the business proportion based on the number of rooms used and hours worked. Alternatively, HMRC's simplified flat rate method lets you claim a fixed amount based on how many hours a month you work from home (£10, £18, or £26 per month depending on hours). This guide on grey-area expenses covers the home office calculation in more detail.

Rent a Room Relief (Landlords)

If you rent out a furnished room in your own home, the first £7,500 per year is tax-free under the rent a room scheme. If you use this relief, it is reported in its own rent-a-room fields in your property quarterly update - not as an expense deduction.

Adjustments for Prior Period Errors

If you made a mistake in a previous quarterly update and need to correct it, some software allows an adjustment field here. In practice, most corrections are made by amending the original quarter rather than making an adjustment in the current one. If you have filed an error, this step-by-step amendment guide explains the process.

How to Spot Errors Before You Submit

Before you click submit, run through these checks:

• Does your income figure match your records? Add up invoices paid or rent received and compare to what you have entered. A small difference might be a missed transaction. A large one is a signal something has gone in the wrong field.
• Are any expense fields unusually high? If your admin costs are three times what they normally are, check whether something has been miscategorised.
• Have you included any personal costs by mistake? Go through each category and ask whether every item in it is genuinely for the business or property.
• Have you left any field blank that should have a figure? If you paid for premises, travel, and materials, all three should have entries.
• Are you consistent with last quarter? If you claimed mileage last quarter, you should be using the same method this quarter. Switching mid-year can cause problems.

For a broader look at which errors are serious and which can wait, this post on MTD filing errors is worth reading before you submit.

A Note on Software and How Fields Are Displayed

The field names above reflect the categories HMRC uses in its API specification. Your software may display them with slightly different labels - "cost of sales" instead of "cost of goods sold", or it may combine some categories together. The underlying categories are the same. If you are using bridging software like Affordable MTD, the import process maps your spreadsheet columns to these HMRC fields, so understanding what each category means helps you categorise correctly in your spreadsheet before it is sent.

If your software shows a category you do not recognise, hover over it or check the help text. Do not skip a field just because the name is unfamiliar - it might be the right place for a cost you have been putting elsewhere.

Pulling It Together

The quarterly update form is not complicated once you know what each field is actually asking. Income fields collect gross receipts. Expense fields collect costs split by type. Allowance fields capture the special deductions that sit outside the normal expense list. The most common mistakes are mixing up personal and business costs, putting things in the wrong expense category, and misunderstanding what the income field is asking for. A methodical approach - matching every entry back to a bank transaction or receipt - catches most errors before they become a problem.

If you want to make sure your records are in good shape before you start filling in the form, the bank reconciliation guide is a good place to start. And if you want to understand what happens after you file, this post on what happens next explains the process from HMRC's side.