MTD Monthly vs Quarterly: How Often Do You Have to File?

How often do you actually have to file under Making Tax Digital? The answer depends on which MTD scheme applies to you, and there are more options than most business owners realise. Some businesses can choose monthly filing, most default to quarterly, and a subset can use annual filing with instalment payments. Getting this right affects your cash flow, workload, and administrative burden across the whole year.

This guide covers all three MTD regimes (VAT, ITSA, and Corporation Tax), the standard quarterly cycle, when monthly filing applies, when annual accounting works, and how to choose the frequency that suits your business best. Written by ICAEW chartered accountants who set up MTD submissions for UK businesses every day.

The Basic Answer: How Often Do You File Under MTD?

Here is the short version. Match your business to the right row:

Key point: For most UK businesses, MTD means quarterly submissions. That is 4 submissions per year for each MTD regime you fall under. A VAT-registered sole trader with property income over £50,000 could theoretically be making 8 quarterly MTD submissions per year (4 for VAT + 4 for ITSA), plus one annual Final Declaration.

MTD VAT Quarterly Submissions (Standard for 95% of Businesses)

Most VAT-registered UK businesses file quarterly. The standard quarter ends are 31 March, 30 June, 30 September, and 31 December, though you can choose different quarter end dates if you have specific business reasons.

Standard Quarterly Deadlines

The deadline is 1 month and 7 days after the quarter end. This applies to both submission and payment of any VAT owed.

MTD VAT Monthly Submissions (For Repayment Traders)

Some VAT-registered businesses regularly reclaim more VAT than they charge. These are called ‘repayment traders’ and monthly VAT submissions can be genuinely beneficial for cash flow.

Who Benefits From Monthly VAT?

•       Zero-rated exporters (selling to overseas customers)
•       Businesses selling primarily zero-rated goods (children’s clothing retailers, food wholesalers, book publishers)
•       Businesses in start-up phase with high setup costs and low initial sales
•       Property developers reclaiming construction VAT
•       Businesses with significant capital equipment purchases

How to Switch to Monthly VAT

1.     Log into your Business Tax Account on gov.uk
2.     Navigate to VAT services
3.     Request change of VAT return frequency
4.     HMRC will approve or query within 30 days
5.     Once approved, submissions become monthly with 1 month + 7 days deadline each month

Monthly VAT cash flow benefit: A construction business reclaiming £8,000 per month in materials VAT gets that money back within 5 to 7 weeks under monthly VAT, versus waiting up to 5 months under quarterly. For a growing business, this can be the difference between healthy cash flow and cash flow crisis.

Annual Accounting Scheme (VAT Only)

The Annual Accounting Scheme is a special VAT option that removes quarterly submissions entirely. You file one annual VAT return and make quarterly or monthly instalment payments during the year.

How Annual Accounting Works

•       You make 9 monthly OR 3 quarterly instalment payments based on last year’s VAT liability
•       One VAT return submitted 2 months after your annual accounting period ends
•       Balancing payment or refund calculated when annual return submitted
•       Applications made via HMRC (turnover under £1.35 million to join)

Who Benefits From Annual Accounting?

•       Businesses with predictable, stable VAT liability year on year
•       Businesses that prefer smoothing VAT payments rather than large quarterly bills
•       Smaller businesses who find quarterly submission workload burdensome

Who Should Avoid Annual Accounting?

•       Growing businesses (instalments based on old year may be too low, creating balancing payment shock)
•       Businesses expecting large VAT refunds (annual scheme prevents in-year refunds)
•       Businesses with irregular income patterns (instalments do not match actual liability)
•       Businesses approaching the £1.6 million exit threshold

MTD ITSA: Quarterly Submissions Are Mandatory

Unlike MTD VAT, MTD ITSA does not offer monthly or annual filing options. Every affected sole trader and landlord must file quarterly, with an additional annual Final Declaration.

MTD ITSA Standard Quarterly Deadlines

Deadlines are 1 month after the quarter end. Note MTD ITSA uses tax-year-aligned quarters (starting 6 April) not calendar quarters.

Calendar Quarters Option

If tax-year-aligned quarters do not suit your business, you can elect to use calendar quarters (1 April to 30 June, etc.) with a small extra day added to align with tax year end. This is a one-time election. Choose based on what suits your accounting cycle.

MTD ITSA workload warning: Quarterly submissions plus annual Final Declaration means 5 filing events per year per source of income. A sole trader with both self-employment and property income files 8 quarterly submissions plus 2 annual declarations, all under MTD ITSA. This is significantly more work than the current annual Self Assessment.

MTD Corporation Tax: Quarterly Updates Coming April 2027

MTD Corporation Tax is planned for April 2027. Based on HMRC consultation, the expected pattern is quarterly digital updates plus an annual Corporation Tax return. However, the exact rules are still being finalised.

Expected MTD CT Structure

•       Quarterly digital updates from within your accounting software
•       Annual Corporation Tax return continues (typically 9 months after accounting period end)
•       Corporation Tax payment continues on current timescale (9 months + 1 day after year end for small companies; quarterly instalments for large companies)
•       Digital record-keeping requirements from period start

Read our full MTD Limited Companies and Corporation Tax guide for detailed preparation guidance.

How to Choose Your MTD Submission Frequency

For MTD VAT: 3 Options

Assess whether monthly, quarterly, or annual filing suits your business:

6.     Are you a repayment trader (regularly reclaiming more VAT than you charge)? Monthly likely saves you money.
7.     Are you a standard business with predictable stable VAT liability? Quarterly is standard and works fine.
8.     Do you want to smooth VAT payments across the year? Annual Accounting Scheme worth considering if under £1.35 million turnover.

For MTD ITSA: Quarterly Is Mandatory

You do not have a choice on frequency. Quarterly submissions plus annual Final Declaration are required. Your only real choice is whether to use tax-year-aligned or calendar quarters.

For MTD Corporation Tax: Await Final Rules

HMRC continues to finalise MTD CT rules. Prepare based on the expected quarterly pattern but watch for confirmed guidance in 2026 and 2027.

The Practical Workload: How Much Time Does MTD Actually Take?

A common concern: how much extra work will MTD create? The honest answer depends on your existing setup:

If You Already Use MTD-Compatible Software Well

•       MTD VAT quarterly: 30 to 60 minutes per quarter
•       MTD ITSA quarterly: 45 to 90 minutes per quarter
•       MTD CT quarterly: expected 1 to 2 hours per quarter

If You Are Migrating From Paper or Excel

•       Initial setup: 4 to 8 hours (one-off)
•       First quarter: 2 to 4 hours (learning the software)
•       Subsequent quarters: dropping to 30 to 90 minutes each as workflow becomes automatic

Time-saving reality: Businesses that set up MTD properly report SAVING time overall. The initial investment in software setup and workflow pays back within 6 to 12 months through faster monthly reconciliation, automated bank feeds, and easier year-end preparation.

Case Study: How Monthly VAT Transformed a Zero-Rated Exporter’s Cash Flow

A specialist children’s clothing wholesaler based in the Leicester area came to us in mid 2025 with a specific cash flow problem. Turnover of approximately £420,000, selling mostly zero-rated children’s clothing (0% VAT) to UK retailers. Every quarter they were sitting on £12,000 to £18,000 of reclaimable VAT (paid on supplies, packaging, freight, and overheads) that they only recovered when they filed their quarterly VAT return.

Their situation:

•       Filing standard quarterly VAT returns
•       Consistently receiving £12k to £18k VAT refunds each quarter
•       Waiting 4 to 5 months from earliest VAT paid to receiving refund
•       Growing business needing to fund working capital from other sources
•       Bank overdraft interest costs approximately £1,800 per year attributable to VAT cash flow lag

What we did:

9.     Confirmed they qualified as a repayment trader
10. Applied to HMRC to switch VAT return frequency to monthly
11. HMRC approved the switch within 21 days
12. Adjusted their FreeAgent software to monthly VAT submission mode
13. Set up automated monthly VAT return preparation workflow
14. Trained the founder on the new monthly cadence (approx 45 minutes per month vs 2 hours per quarter previously)

Outcome: VAT refunds now received 4 to 6 weeks after month end rather than 4 to 5 months after quarter end. Working capital improvement of approximately £14,000 average through the year. Overdraft interest saving of £1,800 per year. Slightly more admin time (12 monthly submissions vs 4 quarterly) but each takes less time individually, so overall workload is similar. Fee for our monthly VAT service: £120 per month all-inclusive.

MTD Filing Frequency: FAQs

How often do I have to file under MTD?

For MTD VAT: quarterly by default, monthly if you are a repayment trader, or annually with the Annual Accounting Scheme (if under £1.35 million turnover). For MTD ITSA: quarterly plus annual Final Declaration (mandatory, no alternatives). For MTD Corporation Tax: expected quarterly plus annual return from April 2027.

Can I choose monthly VAT under MTD?

Yes, if you are a repayment trader (regularly reclaiming more VAT than you charge) or if HMRC agrees monthly is appropriate. Apply via your Business Tax Account. HMRC approves within 30 days if criteria are met. Best for zero-rated exporters, construction businesses, and businesses in start-up phase.

What are the standard MTD VAT quarter dates?

Standard quarters end 31 March, 30 June, 30 September, and 31 December. You can choose different quarter ends if there is a business reason (matches your natural business cycle). Deadline for submission and payment is 1 month and 7 days after quarter end.

What are the MTD ITSA quarter dates?

Standard MTD ITSA quarters follow the tax year: 6 April to 5 July, 6 July to 5 October, 6 October to 5 January, 6 January to 5 April. Deadline is 1 month after quarter end. You can elect for calendar quarters instead if that suits your accounting cycle better.

Do I get a choice on MTD ITSA frequency?

No. Quarterly submissions plus annual Final Declaration are mandatory for all MTD ITSA taxpayers. Unlike VAT, there is no monthly or annual option. Your only choice is calendar quarters vs tax-year-aligned quarters.

What is the Annual Accounting Scheme for VAT?

A special VAT scheme where you submit one annual VAT return instead of quarterly. You make 9 monthly or 3 quarterly instalment payments during the year based on last year’s liability, with a balancing payment or refund when the annual return is filed. Available for businesses under £1.35 million turnover.

When does monthly VAT make sense?

When your business regularly reclaims more VAT than it charges. Examples: zero-rated exporters, children’s clothing wholesalers, food wholesalers, book publishers, businesses in start-up phase with high setup costs, property developers with construction VAT reclaims, businesses buying significant capital equipment.

What are the MTD submission deadlines?

MTD VAT: 1 month and 7 days after period end (e.g., 7 May for 31 March quarter). MTD ITSA: 1 month after quarter end. Annual Final Declaration under MTD ITSA: 31 January following tax year end. MTD Corporation Tax: expected similar quarterly pattern from April 2027.

Can I switch between quarterly and monthly VAT frequency?

Yes. Apply via your Business Tax Account. HMRC reviews requests based on business circumstances. Moving from quarterly to monthly is usually approved for repayment traders. Moving back to quarterly is also possible if circumstances change. Both directions take about 30 days for HMRC approval.

What penalties apply for missing MTD deadlines?

Points-based system for MTD VAT and MTD ITSA. Each missed submission earns 1 point. 4 points triggers a £200 penalty for quarterly filers (2 points for annual filers, 5 points for monthly filers). Late payment charges: 3% at 16-30 days late, further 3% at 31+ days late, plus 10% annualised interest.

Does MTD ITSA mean I file 5 times a year?

Yes, for each income source. 4 quarterly submissions plus 1 annual Final Declaration per source. A sole trader with both self-employment AND property income under MTD ITSA files 8 quarterly submissions plus 2 annual Final Declarations, for 10 total filings per year.

Can I still file annual Self Assessment under MTD?

For income over MTD thresholds, no. The annual Final Declaration under MTD ITSA replaces the traditional Self Assessment tax return. It contains all the same information as Self Assessment plus additional MTD-specific data. For income below MTD thresholds, standard annual Self Assessment continues.

How do quarterly MTD ITSA submissions differ from quarterly VAT?

Different data reported: MTD ITSA submits summary of income and expenses (revenue plus expense categories). MTD VAT submits the 9 boxes of the VAT return. Different quarter dates: MTD ITSA follows tax year (April to April). MTD VAT typically follows calendar quarters. Different deadlines: MTD ITSA 1 month, MTD VAT 1 month + 7 days.

Does more frequent filing mean more tax?

No. Frequency affects timing of submissions, not the amount of tax owed. Monthly VAT filers pay the same total VAT as quarterly filers over the year. Monthly VAT just brings forward refunds for repayment traders. Similarly, MTD ITSA quarterly submissions do not create new tax; they just report tax positions more frequently.

Can chartered accountants handle the extra MTD workload for me?

Yes. Most accountants and bookkeepers now offer fixed-fee MTD packages including all quarterly submissions. Fees typically £40 to £300 per month depending on business complexity, with everything included. For most small businesses, this is more cost-effective than doing it yourself given the time involved.

Get Your MTD Frequency Right – Free ICAEW Consultation

Choosing the right MTD filing frequency affects your cash flow, workload, and overall business efficiency. Monthly VAT can save thousands per year for repayment traders. Annual Accounting can smooth cash flow for small stable businesses. Standard quarterly works fine for most, but MTD ITSA mandatory quarterly submissions add significant workload that needs planning.

At MTD – Making Tax Digital (part of B1 Accountants), our ICAEW chartered accountants help UK businesses choose the right MTD filing frequency and handle all submissions on their behalf. We can:

•       Assess whether monthly VAT would save your business money
•       Apply to HMRC to switch VAT return frequency
•       Advise on Annual Accounting Scheme suitability
•       Handle all quarterly MTD VAT and MTD ITSA submissions on your behalf
•       Prepare you for MTD Corporation Tax quarterly updates from April 2027
•       Provide fixed monthly fees from £40 covering all submissions