Make any adjustments to your business income
How to make adjustments after you have submitted your final quarterly update.
After you have submitted your fourth quarterly update, your software will show your income and expenses for the whole of the tax year, for each business that you have.
You may need to make adjustments to the data you have submitted. These adjustments include:
- adjusting the value of individual transactions
- making accounting adjustments, such as adjusting for accruals and prepayments
- making tax adjustments, such as removing disallowable expenses
- claiming reliefs or allowances, such as the rent a room relief or capital allowances
- elections, such as using the trading income allowance instead of deducting your expenses
You may need to adjust an individual digital record of a transaction. For example, if you:
- made a mistake when creating a digital record
- forgot to record an expense or income you received
- need to adjust a record of income, that includes both capital and revenue and you only need to include the revenue portion
You may need to change, delete or create a digital record to adjust the transaction. If you use software that lets you keep digital records, make the adjustment in the software. If you keep digital records on a spreadsheet, make the adjustment in the spreadsheet and digitally link it to the bridging software.
These adjustments will mean that you need to resubmit your final quarterly update.
If you adjust a transaction, you need to resubmit the quarterly update which included the transaction.
If you have an agent but they do not keep digital records for you, they should tell you about any adjustments you need to make.
You may make some adjustments by changing the total for an expense category. This means you do not need to adjust each relevant individual transaction.
For example, you can adjust the expense category for phone costs in proportion to the amount you use it for your business.
These adjustments do not require you to resubmit your final quarterly update.
If you have multiple trades or businesses, you may need to make adjustments for each business.
If you use an accounting period that runs from 1 April to 31 March
You need to make an adjustment at the end of the first tax year in which you have chosen to use calendar update periods. This is so your income and expenses from 1 April to 5 April from before the beginning of that tax year are included in your tax return.
For example, if you sign up to use Making Tax Digital for Income Tax for the 2024 to 2025 tax year, you’ll need to adjust your totals to include your income and expenses from 1 April 2024 to 5 April 2024.
To do this, you’ll need to adjust the totals for relevant income and expense categories to cover this period, in your compatible software.
You do not need to do this for future tax years if you continue using Making Tax Digital for Income Tax.
Find out more about late accounting date rules.
After making your adjustments
After you have made your adjustments:
- your business income will be finalised in your compatible software
- you will be able to see an updated estimate of your tax bill