Making Tax Digital · Sole traders
What to do with your bank records after an MTD quarter ends
ONLY£15A MONTHThe day after quarter end is a good time to check completeness, not to disconnect the bank feed.
The day after quarter end is a good time to check completeness, not to disconnect the bank feed. New transactions still need recording while the previous period is reviewed. Clear dates and a short exception list let both tasks continue together.
Review the boundary carefully
For a standard first period ending 5 July 2026, the next three-month segment starts on 6 July. Calendar-period users have a different boundary. Check the business's actual setting before filtering transactions.
A purchase made before the cut-off but paid afterwards may need different treatment under cash basis and traditional accounting. A bank posting date is not always the whole answer, especially where card providers or other agents collect money. Use a consistent method supported by the underlying records.
Preserve the link between periods
Save statements covering the boundary and check opening and closing balances. Where an import overlaps a live feed, review possible duplicates. Do not remove genuine new-period transactions simply to keep the earlier report visually tidy.
If a late-arriving invoice explains an earlier transaction, attach it to the correct record. If it reveals an error, correct that record through the supported process. Download date and transaction date perform different roles.
Worked example: a statement spanning the cut-off
A statement runs from 20 June to 19 July. It contains entries relevant to both standard quarterly segments. The business keeps the whole statement as evidence and allocates the transactions according to the correct dates and accounting basis.
Importing the file does not mean every entry belongs to July's new segment. Equally, the statement should not be discarded because it extends beyond 5 July.
Reconcile receipts, not just bank payouts
A bank deposit is not always the original sale. A platform, card processor or agent may deduct fees before sending you the balance. Keep the statement showing the gross amount, deductions, refunds and final payout, then explain the difference in your records.
Cash needs the same attention. Record customer cash when received under the cash basis, even if some of it is spent before the rest reaches the bank. Banking cash already recorded as a sale is a transfer between your cash and bank records, not another sale.
HMRC's record-keeping guidance covers income and business expenses. The useful practical test is whether another person could follow a payment from the original sale to the amount received without counting it twice.
Do not use bank feeds as a reason to ignore payment accounts, credit cards, cash or payments made personally for the business. List every place where business money passes, choose the source for each type of transaction and review transfers between those sources. This turns reconciliation into a repeatable check rather than a search through several unrelated statements.
A review that checks more than the total
Start with coverage: the correct person, business and period, plus all relevant accounts and cash records. Then look at completeness. A feed can be connected today while still missing an earlier week. Confirm the earliest and latest transactions against the source.
Next, inspect unusual items. Large transfers, loan receipts, refunds, net settlements and private purchases often need more context than a bank description provides. Check for duplicate imports where a statement overlaps a live feed. An automatic warning is useful evidence to investigate, not proof that the entry must be removed.
Finally, review category totals. A category unexpectedly showing zero, a large increase or a negative amount deserves an explanation. You do not have to make every annual tax adjustment at this stage, but you should understand the records behind the summary you approve.
HMRC explains what quarterly updates contain. Keep the approved version and the resulting acknowledgement together. If something later changes, correct the source record and use the software's supported update process so you can explain which figures are current.
Keep the reporting dates separate from payment dates
The standard first update for 2026/27 covers 6 April to 5 July 2026 and was due by 7 August 2026. The second covers 6 April to 5 October 2026 and is due by 7 November 2026. The third and fourth deadlines are 7 February 2027 and 7 May 2027. These are cumulative updates, not four isolated sets of three-month totals.
Calendar periods have different cut-offs and the same filing deadlines. Check the setting for each business rather than assuming the dates from a bank statement. HMRC lists both reporting calendars.
The annual return for 2026/27 is due by 31 January 2028. The earlier 2025/26 return normally remains due online by 31 January 2027. Keeping those years distinct avoids a common transition-year misunderstanding.
Payments on account, where required, follow their own January and July timetable. An update acknowledgement confirms a reporting event; it does not confirm that an outstanding tax bill has been paid. Check your actual HMRC account and payment obligations separately from the software's progress indicators.
Finish the prior review without stopping current work
Confirm coverage, resolve boundary questions and check category totals. Continue the new-period routine and save the accepted update when submitted. A rolling process prevents the next backlog from growing while you finish the last one.
Take the next step
Avona.app offers a self-service route from £15/month. Bring your records together, review the figures and choose a workflow that fits your business. For professional help, discuss the scope and total price of Avona Concierge, managed by chartered accountants, before choosing a service.