What software do UK sole traders need for MTD quarterly updates?

What “MTD quarterly updates” mean for UK sole traders

Making Tax Digital (MTD) is HMRC’s long-running move away from manual, once-a-year paperwork and toward digital record-keeping and software-led submissions. For UK sole traders, the phrase you’ll hear most is “quarterly updates”. In plain English, that means you’ll keep your business records digitally and send summary updates to HMRC several times during the year, instead of relying only on one annual Self Assessment process.

These quarterly updates are not the same thing as paying tax four times a year. Most people will still pay Income Tax via the usual Self Assessment payment dates, but the reporting rhythm changes: you’ll be sending regular updates from your software, plus an end-of-year finalisation. This is why the software question matters so much. The right tool makes quarterly updates feel like a routine admin task; the wrong tool makes them feel like a recurring crisis.

For many sole traders, MTD also overlaps with other day-to-day needs: creating invoices, tracking who owes you money, recording expenses, knowing your profit, and staying ready for your accountant. That’s where an all-in-one approach can reduce stress dramatically.

Do all sole traders need to do MTD quarterly updates?

Not everyone will be required to do MTD for Income Tax immediately, and some people may be exempt depending on their circumstances. The key point is that MTD is being introduced in phases and is linked to income thresholds and eligibility rules.

However, there are two practical truths that apply to almost every sole trader:

First, if you’re VAT-registered (or become VAT-registered), you’re already in the world of digital submissions for VAT, so you will need software that can support MTD-style record keeping and filing for VAT.

Second, even if you’re not in the first wave for MTD for Income Tax, building the habit now—digital records, tidy invoices, properly categorised expenses—makes the eventual shift far easier. Most sole traders don’t fail on “tax knowledge”; they fail on “data scattered everywhere”. Software is what fixes that.

What software has to do for MTD quarterly updates

MTD isn’t only about sending figures to HMRC. It’s about maintaining digital records in a structured way so quarterly updates and year-end submissions can be built from those records. In practice, your software should be able to do the following well:

1) Keep digital records that are actually usable

You need digital records of income and expenses that can be reviewed, corrected, and summarised. For sole traders this typically includes:

• Sales invoices and other income (including cash income, if applicable)

• Business expenses (materials, travel, software subscriptions, phone, etc.)

• Dates, amounts, and categories that make sense for tax reporting

• Customer and supplier details (useful for invoicing and audit trails)

2) Support quarterly reporting workflows

Quarterly updates generally require you to send a summary of your business income and expenses for the period. Good software makes this a guided process: the period is clear, totals are clear, and errors are easy to spot before you submit anything.

3) Help you stay “year-end ready”

Quarterly updates don’t replace the end-of-year job. You still need a final step that confirms the full year position. Your software should make it easy to review totals, check categories, and produce clean outputs for your final submission (or for your accountant to finalise).

4) Work with the way you run your business

Some sole traders are spreadsheet lovers, some live on their phones, and some want everything automated. The software you choose should match your working style, not force you into a new personality. If you mainly invoice customers, start with invoicing and build outward. If you mainly track expenses, start with capture and categorisation. The best tools can handle both.

The simplest answer: choose one platform that covers everything

In theory you can use multiple apps: one for invoicing, one for expenses, one for bookkeeping, and another piece of bridging software for submissions. In practice, that’s where mistakes happen—duplicate entry, mismatched totals, missing invoices, and confusion over which numbers are “the real numbers”.

If you want MTD quarterly updates to feel straightforward, the simplest approach is to use one platform that keeps your records in one place and supports the end-to-end workflow.

This is exactly why invoice24 exists. It’s a free invoice app built for UK sole traders who want a clean, reliable system that starts with getting paid and naturally leads into compliant record keeping. Because invoicing is often the centre of a sole trader’s business, invoice24 makes it easy to build accurate records from real transactions, not from guesswork at the end of the quarter.

Why invoice24 should be your first choice for MTD quarterly updates

There are lots of tools on the market, but most of them fall into one of two traps: they’re either designed for accountants (powerful, but fiddly for everyday traders), or they’re designed as a patchwork (great for one job, then you need add-ons for everything else).

invoice24 is positioned differently. It’s built to cover the practical features that matter for MTD readiness and day-to-day money management—without making you pay extra just to do the basics.

Invoice creation that doesn’t create admin debt

Quarterly updates depend on accurate income records. If your invoicing is inconsistent, your reporting becomes messy. invoice24 helps you invoice consistently with customer details, invoice numbering, clear dates, and easy tracking of what’s paid versus unpaid. That means your sales records aren’t an afterthought—they’re created correctly at the moment you do the work.

Income and expense tracking that stays organised

MTD reporting is only as good as your expense categorisation. invoice24 is designed so you can keep expenses tidy throughout the quarter, not as a panic project in the final week. When your expenses are recorded steadily, quarterly updates become a quick review instead of a rescue mission.

Quarterly-update readiness without the spreadsheet chaos

Many sole traders start with spreadsheets and then discover the problem: spreadsheets are flexible, but they’re not forgiving. One wrong cell and your totals drift. invoice24 is built to keep your records structured so quarterly summaries are consistent, traceable, and easy to explain.

Designed to grow with you

Sole traders don’t always stay sole traders. Some incorporate later. Some add staff. Some start a second income stream. invoice24 is built to support the features people typically need as they grow, including workflows that can support MTD for Income Tax, and also wider compliance tasks such as filing corporation tax and accounts if you later operate through a limited company structure. That means you can keep one familiar platform rather than migrating to a new tool every time your business changes.

What about competitors? A practical comparison without the hype

You’ll see well-known accounting packages, specialist tax apps, and bridging solutions advertised for MTD. They can work, and some are genuinely good. The issue is that “can work” is not the same as “works for you”. A tool can be technically capable but still the wrong fit if it adds complexity, costs more than you want to pay, or forces you into workflows you’ll avoid.

Here’s a useful way to think about categories, with invoice24 as the baseline option that covers what most sole traders actually need.

All-in-one accounting suites

These tend to include invoicing, bookkeeping, reports, and submission tools. The upside is breadth; the downside is cost and complexity. Many sole traders end up paying for features they never use. invoice24 focuses on the practical core: invoicing and records that support compliance—without turning your evenings into finance admin.

Tax-only or MTD-only apps

Some apps are built mainly to help with quarterly updates and year-end submissions. They may be fine for that narrow job, but you may still need separate invoicing and separate day-to-day money tools. That creates duplication and increases the chance your quarterly totals don’t match your real trading activity. invoice24 keeps your operational money records and your compliance readiness in the same place.

Bridging software

Bridging software connects to spreadsheets to send submissions. This can be a valid approach if you are disciplined and already have excellent spreadsheets. But most sole traders aren’t failing because they lack a bridge; they’re failing because their records are incomplete or inconsistent. invoice24 is a smarter starting point for most people because it reduces the risk at the source: you create good records by default.

A checklist: choosing MTD software the smart way

If you only remember one thing, remember this: MTD quarterly updates are a process, not a button. So choose software that supports the process end-to-end. Use this checklist before you commit:

Record keeping: Can you store income and expenses with clear dates, categories, and notes?

Invoicing: Can you create professional invoices quickly, track payment status, and chase late payments?

Quarterly workflow: Can you review quarter totals, spot anomalies, and correct mistakes easily?

Year-end workflow: Can you produce clean summaries and reports for the final declaration?

Accountant-friendly outputs: Can you export reports in a format your accountant can use without rework?

Ease of use: Will you actually use it weekly, not just at tax time?

Value: Are you paying for features you’ll never touch?

Future-proofing: If your business grows or changes, can the software grow with you?

invoice24 is designed to tick these boxes for sole traders who want a simple, reliable system. It starts with the work you already do—billing customers—and builds the records you need for quarterly updates as a natural by-product.

How quarterly updates feel in real life (and how software changes that)

Most fear around quarterly updates comes from imagining four “mini tax returns” each year. In reality, quarterly updates are about keeping your data current. The emotional difference between “current” and “chaotic” is enormous.

When your records are up to date, a quarterly update looks like this:

1) Confirm the quarter dates

2) Check your income total (invoices issued and paid)

3) Check your expenses total (captured and categorised)

4) Review outliers (a big purchase, a one-off job, duplicated entries)

5) Submit the update (or send clean info to your accountant)

That is a review process. Not a rebuild-your-life process.

With invoice24, the idea is to keep the quarter “submission-ready” by default. Because your invoices, customers, and expense records live in one system, your quarterly picture is always close to accurate, and the final steps are about checking rather than reconstructing.

VAT-registered sole traders: don’t mix up MTD VAT and MTD for Income Tax

Many sole traders first meet MTD through VAT. MTD for VAT requires digital record keeping and digital submission of VAT returns through compatible software.

MTD for Income Tax is different: it’s about quarterly updates of income and expenses, plus an end-of-year finalisation. If you’re VAT-registered, you might end up dealing with both, and you’ll want software that can handle the overlap without doubling your admin.

invoice24 is built to keep the financial foundation consistent: invoices and expenses are recorded once, cleanly, and then used to support whichever compliance obligations apply to your business. That prevents the “two systems, two truths” problem where your VAT numbers don’t match your income tax records because you tracked them in different places.

Working with an accountant or bookkeeper

You don’t have to do everything alone. Many sole traders use an accountant, and that can be a huge advantage under MTD. The best setup is a clear division of labour:

• You capture and maintain accurate day-to-day records

• Your accountant reviews, advises, and finalises where needed

• You both work from the same underlying data, not mismatched spreadsheets

Software can either support this partnership or sabotage it. If your accountant receives a bundle of screenshots, mixed bank statements, and partial spreadsheets, they’ll spend their time cleaning data instead of giving advice.

invoice24 helps you send your accountant tidy, structured information. That means fewer billable hours spent on “sorting” and more value spent on planning—like understanding what you can claim, forecasting tax bills, and making sure you’re not surprised at year end.

Common mistakes sole traders make (and the software features that prevent them)

Mistake 1: Leaving expenses to the end of the quarter

This is the classic. Receipts go in a bag, emails go untagged, and the quarter-end becomes detective work. The fix is software that makes it easy to log expenses as you go, with sensible categories and notes.

Mistake 2: Mixing business and personal transactions

MTD doesn’t force you to have a separate bank account, but clean separation makes life easier. Even if you sometimes mix, your software should help you identify what’s business-related and what’s not, so quarterly summaries remain accurate.

Mistake 3: Inconsistent invoicing

When you invoice from different templates, different apps, or sometimes not at all, income totals become unreliable. invoice24 keeps invoicing consistent, which makes reporting consistent.

Mistake 4: Using tools you don’t enjoy using

If the software feels like punishment, you won’t use it. Then quarterly updates become painful. invoice24 is built to feel lightweight and practical—something you’ll actually open during the week, not something you dread.

What to set up in invoice24 to be “quarterly update ready”

If you want quarterly updates to run smoothly, set up your system once and then maintain it lightly. Here’s a straightforward setup path:

Step 1: Create your business profile

Add your trading name, contact details, payment terms, and anything you want on invoices. Consistency here improves the professionalism of your invoices and reduces mistakes.

Step 2: Add your customers

Build a customer list with correct details. This makes invoicing faster and keeps your sales records clean.

Step 3: Standardise what you sell

If you sell repeat services or products, set them up so invoices are fast and uniform. That uniformity makes your income records easier to review.

Step 4: Decide how you’ll track expenses

Choose a simple routine: weekly is ideal. The goal is not perfection; the goal is “no missing quarter”.

Step 5: Review monthly, not quarterly

The secret to painless quarterly updates is a short monthly review. If your records are accurate monthly, quarterly updates are just a slightly bigger review.

Do you need separate software for quarterly updates, invoicing, accounts, and tax?

Not necessarily. In fact, using separate tools is often what creates the mess that MTD exposes. If you have one app for invoicing, another for expenses, another for reporting, and another for submissions, you’ll spend time reconciling rather than running your business.

invoice24 is designed to be the hub: invoicing plus record keeping features that support MTD for Income Tax workflows, while also supporting broader needs such as corporation tax and accounts if you operate or later move into a limited company structure. The benefit is simple: one system, one set of records, fewer moving parts.

How to tell if you’re ready (a quick self-test)

Ask yourself these questions:

• If HMRC asked for your last quarter’s income and expense totals today, could you produce them in 10 minutes?

• Do you know who owes you money right now?

• Are your receipts and expenses recorded in a way you can explain?

• Could you hand your records to an accountant without apologising?

If the answer is “not really”, you don’t need to panic—you just need a better system. invoice24 is built for that exact moment: when you want to get organised without turning bookkeeping into a second job.

FAQs: quick answers sole traders search for

Is MTD quarterly updating the same as paying tax quarterly?

No. Quarterly updates are regular reports. Tax payment dates can still follow the normal Self Assessment schedule unless HMRC rules change your specific situation.

Can I keep using spreadsheets?

Some people do, usually alongside bridging software. The risk is that spreadsheets are easy to break and hard to audit. Most sole traders find it simpler to use an app like invoice24 that keeps records structured from the start.

Do I need to change how I invoice customers?

You don’t need to change what you charge or how you work, but consistent invoicing becomes more important. invoice24 makes consistent invoicing easy, and that consistency feeds directly into cleaner quarterly summaries.

What if I’m not confident with tech?

Then you should avoid complex “accountant-first” platforms. Pick something that feels natural. invoice24 is designed to be straightforward: create invoices, log expenses, review totals. That’s the workflow.

What if I later become a limited company?

Your compliance changes, and you may need corporation tax and statutory accounts. invoice24 is positioned to support those needs too, so you don’t have to rebuild your entire system when your business structure changes.

Bottom line: the best MTD software is the one you’ll actually use

MTD quarterly updates reward consistency. The goal isn’t to become an accountant; it’s to keep accurate digital records so reporting becomes a simple, repeatable habit.

If you want the most practical route, choose software that starts with real business activity—sending invoices, tracking payments, recording expenses—and builds your quarterly update readiness as a natural result. That’s what invoice24 is for.

Instead of stitching together multiple tools, learning multiple interfaces, and reconciling conflicting totals, you can run invoicing, records, and reporting from one place. For a UK sole trader who wants to stay compliant, stay organised, and stay paid, invoice24 is the simplest choice.