Do I Have to File a Quarterly Update if I Had No Income?

The Short Answer: Yes, You Probably Still Need to File

If you had no income in a quarter - no sales, no rental income, nothing - you might assume there is nothing to report and nothing to file. That is a reasonable assumption. It is also, in most cases, wrong. Under Making Tax Digital for Income Tax (MTD ITSA), HMRC expects a quarterly update for every quarter in your reporting period, including quiet ones. This post explains exactly what is required, why a nil quarter still matters, and what you should actually do if your income drops to zero.

What Is a Quarterly Update, and Why Does It Exist?

A quarterly update is a report you send to HMRC four times a year through MTD-compatible software. It summarises your income and expenses for that three-month period. It is not a payment demand, and it is not a full tax return - it is more like an ongoing snapshot of your finances that feeds into your final declaration at the end of the tax year.

If you want a fuller picture of how quarterly updates fit into the MTD system, this plain-English guide to what MTD actually requires is a good starting point. And if you are still unsure whether MTD applies to you at all, check our eligibility checker first.

Do You Have to File If You Had Zero Income?

Yes. Once you are registered for MTD ITSA, you are required to submit a quarterly update for each quarter in that tax year - even if your figures are zero. HMRC does not currently offer a formal "nil return" option where you can simply declare nothing happened. The mechanism is the same: you open your MTD software, enter your income as £0 (or leave it blank, depending on your software), enter any expenses you incurred, and submit.

Think of it this way: the requirement is to submit the update, not to have income to report.

Who This Affects Most: Seasonal and Irregular Earners

This question comes up most often for people with seasonal or irregular income. Common examples include:

• A sole trader who does most of their work in summer and has very little activity in the January-to-March quarter.
• A landlord whose property is empty between tenants for an entire quarter.
• A freelancer who took extended time off sick, on parental leave, or between contracts.
• A sole trader who started their business mid-year and had no income in their first registered quarter.

In all of these situations, the filing obligation still applies. The fact that your income is irregular or seasonal does not remove the requirement to file each quarter once you are enrolled in MTD.

What If I Have Expenses But No Income?

This is very common - particularly for landlords with an empty property who still pay mortgage interest, insurance, or service charges, or for sole traders who are still buying equipment or paying subscriptions during a quiet period. In this case, you should still file the quarterly update and include those expenses. Recording expenses without corresponding income is perfectly normal and legitimate.

Expenses claimed during low-income quarters can reduce your overall tax bill for the year. Leaving them out of your quarterly update does not mean you lose them entirely - you can include them in your final declaration - but capturing them quarterly keeps your records accurate and makes the end-of-year process much simpler.

If you are unsure which expenses you can legitimately claim, this guide to allowable expenses for sole traders and landlords covers the main categories. Landlords should also read which landlord expenses count under HMRC rules.

What About the Trading Allowance?

If you are a sole trader with very low gross income - under £1,000 in a tax year - you might be entitled to use the trading allowance instead of claiming individual expenses. This is a flat £1,000 deduction that can replace your actual expenses. However, this is an annual calculation, not a quarterly one, and it is handled at the final declaration stage rather than in quarterly updates.

For the quarterly update itself, you still report your actual income and actual expenses as they occur, even if you intend to use the trading allowance when you finalise. More on how the trading allowance works in an MTD context is in this guide to the trading allowance for sole traders.

Why the Nil Quarter Still Matters for Your Final Declaration

Your quarterly updates are not assessed individually by HMRC in the same way a full tax return is. Their real purpose is to build up a running record across the year, which feeds into your final declaration - the document you submit after the tax year ends that confirms your actual income and tax liability.

If you skip a quarter - even a nil one - you create a gap in your reporting chain. That gap can cause problems when you try to complete your final declaration, because your submitted figures will not match what your software has recorded across the year. It can also raise questions if HMRC ever cross-checks your submissions.

For more on how the final declaration works and what it pulls together from your quarterly updates, see how quarterly updates and the final declaration fit together.

What HMRC Actually Expects You to Submit

For a nil or near-nil quarter, here is what you typically need to do:

1. Log into your MTD software - in AffordableMTD's case, that is your bridging software dashboard.
2. Open the relevant quarter - make sure you are filing for the correct three-month period. The four quarters run from 6 April to 5 July, 6 July to 5 October, 6 October to 5 January, and 6 January to 5 April.
3. Enter your income - if it is zero, enter £0 or leave the field blank, depending on what your software requires. Do not omit the step entirely.
4. Enter any expenses you did incur - even in a quiet quarter, you may have some. Include them.
5. Submit before the quarterly deadline - deadlines fall one month after the end of each quarter. The full list of MTD quarterly deadlines for 2026-27 is available here.

That is it. You do not need to explain why your income was zero. You do not need to attach evidence. You simply submit the figures as they are.

What If My Software Shows an Error for a Zero Figure?

Some people find that their software flags an issue if income is left at zero. This is usually a validation check rather than a genuine block. Check whether the software requires you to enter a "0" rather than leaving a field empty. If you are using bridging software like AffordableMTD, the quarterly update form will guide you through each field. If something seems wrong, check the help documentation or contact support before the deadline passes.

Can You Be Exempt From Filing for a Quiet Quarter?

There is no specific exemption for low-income or nil-income quarters under the current MTD rules. Exemptions exist at the level of whether you need to be in MTD at all - for example, if you are below the gross income threshold, or if you have a reasonable excuse for missing a deadline. But once you are enrolled and inside the MTD system, the quarterly update obligation applies to every quarter, regardless of your income in that period.

If you think you may have grounds to delay MTD enrolment altogether - perhaps because your income fluctuates around the threshold - this guide on MTD exemptions and delays covers the scenarios where postponement may be possible.

It is also worth reading five common MTD myths - one of the most persistent is that you only need to file when you have something to report.

Keeping Records in a Nil Quarter

Even if you have nothing to file in terms of income, HMRC still expects you to maintain records that cover that period. That means keeping bank statements, noting any expenses, and being able to demonstrate that your zero figure is accurate - not that you simply forgot to record anything.

Good record-keeping habits do not take long if you build them into a routine. This 15-minute-a-week system works just as well for quiet quarters as busy ones. And if you use a spreadsheet to track your figures, here is what HMRC accepts in terms of spreadsheet record-keeping.

Bank Reconciliation Still Applies

Even in a nil quarter, it is good practice to reconcile your bank account before filing. This confirms there are no transactions you have missed or misidentified. A quiet quarter is actually the easiest time to do this - there is less to check. This guide on reconciling your bank account before filing walks through the process.

A Practical Note for Landlords With Empty Properties

If your property was empty for an entire quarter, your rental income will be zero. But your expenses almost certainly will not be. You may still have:

• Mortgage interest payments
• Buildings insurance
• Service charges or ground rent
• Letting agent fees (for advertising a new tenant, for example)
• Repair or maintenance costs to prepare the property for re-letting

All of these should be recorded and included in your quarterly update. Do not wait until the property is occupied again before you start filing. You still owe a quarterly update for the empty period. See what landlords can claim for mortgage interest in MTD and whether service charges and ground rent are allowable.

A Practical Note for Sole Traders With Seasonal Gaps

If your business is seasonal - say, you work as a gardener, a holiday let operator, or a market trader - you may have entire quarters where invoices drop to zero. The obligation to file does not drop with them. Use quiet quarters to make sure your records from your busy period are complete and accurate. It is also a good time to review any expenses you incurred over the quiet period, such as insurance renewals, tool purchases, or professional memberships.

For more on keeping records consistent across the year, this guide to setting up a record-keeping system for MTD is worth bookmarking.

Summary: What You Need to Remember

The filing obligation in MTD does not switch off when your income does. Once you are enrolled, you submit a quarterly update every quarter - including quarters where your income was zero or very low. A nil update is straightforward to submit: enter your figures (including zero income if that is accurate), add any legitimate expenses, and file before the deadline. Missing a nil quarter can still trigger a penalty point. And capturing expenses in quiet quarters keeps your final declaration accurate without a last-minute scramble.