Do I pay tax every quarter under Making Tax Digital?

No. A Making Tax Digital update is a report, not a payment. Tax is still due by 31 January and 31 July, exactly as before MTD started in April 2026.

Making Tax Digital for Income Tax (MTD) means sending HMRC four updates a year. It is easy to assume four bills come with them. They do not. GOV.UK says MTD "will not change the way you pay tax or the dates that payments are due". The rules below follow GOV.UK as checked on 16 October 2026.

Updates and payments are separate

A quarterly update is a set of totals for your self-employment and property income and expenses. GOV.UK calls these updates "summaries, not tax returns". Sending one does not create a bill.

Your bill still comes from your tax return, due by 31 January after the end of the tax year. That return produces your Self Assessment tax bill, and payment dates are unchanged:

• 31 January: any balancing payment for the year just ended, plus your first payment on account for the current year
• 31 July: your second payment on account

Payments on account are each usually half of last year's tax bill, including Class 4 National Insurance if you are self-employed. You do not have to make them if last year's bill was under £1,000, or if more than 80% of last year's tax was collected another way, such as through a tax code.

A year in MTD, payment by payment

Here is a plasterer who joins MTD on 6 April 2027. Their 2025-26 bill was £3,600, so they paid £1,800 on account on 31 January 2027 and £1,800 on 31 July 2027 towards 2026-27. Their 2026-27 bill turns out to be £4,000.

The balancing payment is £4,000 minus the £3,600 already paid, which is £400. Each payment on account for 2027-28 is half of £4,000, which is £2,000. Four updates, three payment dates, and none of the payments falls on an update deadline.

Paying more often if you prefer

Some people like paying little and often, which suits a trade where money comes in job by job. GOV.UK lists ways to pay before the deadline:

• a Budget Payment Plan, with weekly or monthly Direct Debits towards your next bill, which you can pause for up to 6 months
• one-off payments by online or telephone banking, a single Direct Debit or cheque

To set up a Budget Payment Plan you must be up to date with your last Self Assessment bill. If what you have paid does not cover the next bill, you pay the difference. If you are in credit, you can ask for a refund. In the example above, £2,400 spread over six monthly payments from August to January is £400 a month.

What this means for you

Your cash flow does not change because of MTD. What MTD adds is better information. After each quarterly update you can see an estimate of your tax bill for the year so far, in your software and your HMRC online account. Use it to set money aside rather than finding out in January.

One thing does change: late payment penalties. The new ones apply from the tax year you join MTD, and GOV.UK says that from April 2027 they will apply to everyone who sends a personal Self Assessment tax return. Under them, a balancing payment paid more than 15 days late can bring a percentage penalty, with a 30-day allowance in your first year. These penalties do not apply to payments on account, and late payment interest runs from the first day either way.

Steps to manage your tax payments under MTD

1. Note the two payment dates, 31 January and 31 July, separately from the four update deadlines.
2. After each quarterly update, check the tax estimate in your software.
3. Move that amount, or a share of it, into a separate savings account.
4. If you would rather pay as you go, set up a Budget Payment Plan in your HMRC online account.
5. If you cannot pay on time, contact HMRC as early as possible about a payment plan.

The free MTD check shows when MTD starts for you, and our guide to payments on account explains the 31 July payment in detail. The trades section and landlord section describe our service.