Making Tax Digital for Income Tax Quarterly Update Checklist Template

The preparer starts the run about fourteen weeks before the update deadline, while the update period is still running. The answers on the first task assign every task, set each due date from the deadline and add the phases this client needs.

• Record the client, the update and who does what — the client’s name, the tax year, which update this is, its deadline, which income the client has, and the preparer, reviewer and client manager
• Check the client must use Making Tax Digital this tax year — the qualifying income on the last tax return against the threshold for this tax year, any letter from HMRC, any exemption, and the client signed up
• Confirm the agent authorisation and who sends the update — whether your firm is the client’s main agent or a supporting agent, any other agent working on the same business, and who sends the one combined update for the period
• Confirm the update periods and the software — standard update periods (from 6 April) or calendar update periods (from 1 April), chosen in the software before the first update of the tax year, and the compatible software for each business
• Check each business is set up in the software — one self-employment business for each trade, one UK property business for all the UK lets and one foreign property business, each with its own digital records and its own update

The preparer keeps the digital records current while the period runs, then checks them to the period end. A gap found now is cheaper to close than one found the week the update is due.

• Agree how the client sends records this period — bank feeds, a receipts app, sales invoices, letting agent statements or a linked spreadsheet, and the date the client sends anything the feeds do not hold
• Check the bank feeds are connected and importing — every bank account and card the businesses use connected to the software and importing without gaps since the start of the tax year
• Check the digital links between the software products — every transfer from the record-keeping product to the product that sends the update made by a digital link, with no record retyped or copied and pasted
• Bring the records up to date mid-period — the transactions so far recorded and categorised as they come in, so the period end is a check rather than a catch-up
• Add the records the bank feed misses — cash takings, expenses paid personally, transactions that come through in part and rent a letting agent pays over after its fees, added as their own digital records
• Chase the client for missing records — one list of what is still missing sent to the client, with the date you need it by to keep the approval date
• Confirm every transaction to the period end is recorded — the last day of the update period checked in the software, with every transaction up to that date recorded and nothing after it
• Reconcile each bank account to the period end — the balance in the software agreed to the bank statement at the period end for each account, with any difference explained
• Check every record has the right category — every record in a Self Assessment income or expense category, nothing left uncategorised, and personal items left out or recorded as disallowable

Applies only when the client has self-employment income (ticked on the first task). Each trade keeps its own digital records and sends its own update.

• Check each trade has its own records — a separate set of digital records for each sole trader business, so each trade sends its own update
• Check each trade’s income for the period — sales, takings and fees for the tax year to date, matched to the invoices issued and the money received
• Check each trade’s expenses for the period — stock, travel, office and financial costs in the right categories, with any personal share left out or recorded as disallowable

Applies only when the client has UK property income (ticked on the first task). Every UK let, including the client’s share of a jointly let property, is one UK property business with one update.

• Check the rent for every UK property is recorded — rent and other property income for each UK property, including the client’s share of any jointly let property, all in the one UK property business
• Check the UK property expenses — repairs, maintenance, letting agent fees and other property costs in the right categories, with personal or capital items queried
• Record how jointly let property is reported — whether the updates include income and expenses or income only for any jointly let property, as the guidance allows

Applies only when the client has foreign property income (ticked on the first task). The records are kept for each foreign property, and the software adds them into one foreign property update.

• Check there are separate records for each foreign property — a set of digital records for each foreign property, and for the client’s share of any jointly let one, all in the one foreign property business
• Check foreign property income and expenses — rent and costs for each foreign property recorded for the tax year to date, in the right categories

The reviewer reads the year-to-date totals before the client sees them, and the client answers the questions the records raised in one list.

• Check corrections to earlier periods are in the records — errors found since the last update corrected in the records, so the year-to-date totals in this update include them
• Review the year-to-date totals for each business — the totals from the start of the tax year to the period end for each business, compared with the last update and the same period last year, with anything unusual queried
• Clear the review points — each point the reviewer raised answered or corrected in the records, and the reviewer told
• Send the client the questions — the questions the records raised (unknown receipts, personal items, missing invoices) sent to the client in one list, with the date the answers are needed
• Record the client’s answers and update the records — each answer recorded beside its question and the records changed where the answer needs it, with any open item noted

The client sees the totals for each business and approves them before anything is sent. The approval is the gate: the updates in Phase 8 cannot be ticked off until it is done.

• Send the client the totals to approve — the income and expense totals for each business for the tax year so far, with the changes the answers made, sent to the client with the date you need approval by
• Record the client’s approval of the update — the client confirms the totals for each business are right before the update is sent; nothing after this task can be ticked off until it is done
• Correct the totals and go back to the client — the records changed as the client asked, the new totals sent back, and the approval task changed to Approved once the client confirms, or un-completed and completed again

One update for each business, sent from the compatible software after the client’s approval and before the deadline. Only the updates for the income ticked on the first task appear.

• Send the self-employment update for each trade — one update for each trade, covering the tax year to the period end, sent from the compatible software
• Send the UK property update — one update for the UK property business, covering the tax year to the period end, sent from the compatible software
• Send the foreign property update — one update for the foreign property business, covering the tax year to the period end, sent from the compatible software
• Check HMRC received each update — the software’s confirmation saved for each update sent, and the client asked to check their HMRC online account where you cannot see it
• Send the client the tax estimate — the estimate of the tax bill for the year so far, from the software or HMRC online services, sent to the client with what it leaves out
• Update the query log for the year end — open questions, items to adjust at the year end and anything HMRC asked about, written in the log the next update and the tax return start from

The run ends by setting up the next one. After the fourth update, three more tasks appear for the end-of-year steps that lead to the tax return.

• Set the reminder for the next update — the next deadline and the date its checklist starts, set in your practice calendar or on a CheckFlow schedule
• Note the adjustments for the year end — disallowable or personal shares, capital items, simplified expenses, allowances and accounting adjustments seen this period, noted for the work after the fourth update
• Send the fourth update again if the records change — the fourth update sent again before any tax adjustments when an error is corrected, jointly let property expenses are added or Rent-a-Room income is recorded
• Make the year-end adjustments in the software — reliefs, allowances, tax and accounting adjustments and capital allowances made to the annual totals, agreed with the client
• Plan the tax return before 31 January — other income and gains added, HMRC’s figures checked, the calculation agreed with the client and the return submitted from the software by the main agent
• File the evidence and close the run — the reconciliations, questions, approval and confirmations kept with the client’s records, and the run closed