Cumulative quarterly figures explained with a worked example
Each Making Tax Digital quarterly update is cumulative. It reports your total income and expenses from the start of the tax year (6 April) up to the end of the latest period, not just the last three months.
Worked example
| Period | Income in the quarter | Expenses in the quarter | Figures you send |
|---|---|---|---|
| Quarter 1 | £4,000 | £1,000 | Income £4,000, expenses £1,000 |
| Quarter 2 | £5,000 | £1,500 | Income £9,000, expenses £2,500 |
| Quarter 3 | £3,500 | £900 | Income £12,500, expenses £3,400 |
| Quarter 4 | £6,000 | £1,600 | Income £18,500, expenses £5,000 |
Taxable profit for the year to date is income minus allowable expenses. Disallowable items, such as client entertainment, are shown separately and are not deducted.
Why it matters
- Each update replaces the one before it, so every update must include the earlier quarters.
- If you spot a mistake, fix your records and send the next update with the corrected year-to-date totals.
- Keeping each quarter’s bank entries separate makes it easy to see what changed.
How MTD Software does this
Paste each quarter’s bank entries into its own tab and categorise them. The results panel then shows “Cumulative to end of Quarter 1, 2, 3 or 4”. It also shows “HMRC taxable profit for filing”. Save the result as a PDF, then enter the figures into HMRC-recognised software. See the deadlines for when each is due.
Related guides
- Who needs Making Tax Digital for Income Tax
- Quarterly update deadlines
- Allowable expenses and categories
- Cumulative figures explained
This guide is general information, not tax advice. Always check GOV.UK or ask an accountant about your own position.