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Received an HMRC letter about a missed quarterly update

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Summary

What to do if HMRC says you missed a quarterly update you sent from Sage Accounting.

Description

HMRC has sent letters to customers who did not have an accepted first quarterly update for one or more income sources by 7 August 2026.

You may receive a letter even if an update shows as Completed in Sage. This is because HMRC treats each income source separately. An update may be complete for one income source while another is still outstanding. The letter may not identify which income source is affected.

Cause

You may have received the letter because:

  • You have more than one income source, and HMRC is still waiting for an update for one of them
  • You sent an update, but HMRC has not accepted it yet
  • You sent your Q1 update after the 7 August deadline

Each sole trader business is a separate income source. All UK rental properties count as one UK property income source. Overseas property is a separate income source and is not currently supported in Sage.

Resolution

Before you begin

When an update shows as Completed, Sage has received confirmation that HMRC accepted it. No further action is needed for that particular income source.

A Fulfilled update for one income source does not cover any others. Follow the steps below to check every income source HMRC holds for you.

Step 1: Check what HMRC has registered for you

▼ Check your income sources

  1. Sign in to your HMRC online account.
  2. Go to Manage Self Assessment.
  3. Check the income sources HMRC has registered for you under Making Tax Digital.
  4. Compare these with the businesses you have in Sage.

Each income source needs its own business in Sage and its own quarterly update. The exception is overseas property, which must be managed using other HMRC-recognised software. 

If an income source:

  • Has stopped: Tell HMRC that it has ceased.
  • Was added incorrectly: Check the details with HMRC. You may wish to consider entering a cessation date before 6 April 2026, if appropriate.
  • Is duplicated: Check with HMRC. You may wish to consider ceasing the duplicate with the open obligation, if appropriate.

Do not treat HMRC guidance as an instruction to cease an income source. Check with HMRC before making changes to its records.

Step 2: Check the status of each business in Sage

▼ Check your quarterly update status

For every business:

  1. Sign in to Sage.
  2. Switch to the business you want to check.
  3. Open the Income Tax summary.
  4. Find Quarterly update 1.
  5. Check the status and follow the relevant action below.

Quarterly update 1 covers 6 April to 5 July 2026, or 1 April to 30 June 2026 if calendar update periods are used.

Status What it means What to do

Completed

HMRC has accepted the update. Sage shows the date it was sent. 

Nothing. This income source is done for Q1. 

Updating... 

The update has been sent and Sage is waiting for HMRC to confirm it. This usually takes a couple of hours. 

Check again later. It will change to Fulfilled once HMRC accepts it. 

Update required 

The quarter has ended and HMRC hasn't accepted an update for it yet. 

If this is Quarterly update 1 and you didn't send it, you can't send it on its own now. Your Q2 update covers it. Once your Q2 update shows Fulfilled, there's nothing more to do for Q1 (see "If you didn't send a Q1 update"). If you sent an update and the status has gone back to Update required, HMRC hasn't accepted it. 

Current quarter 

The quarter is still in progress, or HMRC has told Sage the quarter is still open. 

If the quarter has ended and you've already sent the update, HMRC hasn't accepted it. Follow the same steps as Update required. 

Locked 

The quarter hasn't started yet. 

Nothing yet. 

Cancelled 

HMRC has no update due for this income source for this quarter. 

Nothing. If you think this is wrong, contact HMRC. 

An accountant or another product sent the update

Sage cannot see an update sent through a different software provider. Ask your accountant or provider to confirm that HMRC received and accepted it for the relevant income source.

Step 3: Find the situation that applies to you

▼ Choose what applies to you

▼ If you did not send Q1 or received an error

You cannot go back and send Q1 on its own. Quarterly updates are cumulative.

  1. Make sure each income source has its own correctly configured Sage business.
  2. Include transactions from the beginning of the tax year.
  3. Send the Q2 update for each income source by 7 November 2026.
  4. Check later that each update shows Completed.

Only send Q2. Do not send separate Q1 and Q2 updates. HMRC is not applying penalty points for late quarterly updates in the 2026/27 tax year. From 6 April 2027, late quarterly updates count towards penalty points.

▼ If you sent Q1 after 7 August

HMRC may have produced the letter before receiving the update.

Check every income source in Sage. If they all show Completed, you do not need to do anything else.

▼ If multiple income sources are in one Sage business

Separate the records so each Sage business contains only the transactions for its matching HMRC income source.

  1. Add a Sage business for the other income source.
  2. Choose the correct type, such as sole trader or UK property.
  3. Connect it to the matching HMRC income source.
  4. Bring in its transactions from 6 April 2026, or 1 April 2026 for calendar update periods.
  5. In the new business, mark transactions belonging to the original business as Non-business money in or Non-business money out.
  6. In the original business, mark transactions belonging to the new business as Non-business.
  7. Check that no income or expenses are duplicated.
  8. Send Q2 from both businesses by 7 November 2026.
  9. Check later that both updates show Completed.

For example, a customer with sole trader and UK property income must have one sole trader business and one UK property business. A customer operating two sole trader businesses must also have two Sage businesses and send two updates. 

▼ If another income source has no Sage business

This includes UK property income or another sole trader business.

  1. Add a business and select the correct business type.
  2. Connect it to the corresponding HMRC income source.
  3. Add its transactions from the beginning of the tax year.
  4. Send its Q2 update by 7 November 2026.
  5. Check later that it shows Completed.

Sage Sole Trader Free covers one business. A second business requires a paid Sole Trader subscription. The price is shown before the customer confirms, and the customer is not charged until selecting Apply selections. All businesses can be managed under one login. 

▼ If the Sage business has the wrong type
  • If it has not sent an update, go to Settings, then Manage business type. Change the type and connect the business to the correct HMRC income source.
  • If it has already sent an update, its type cannot be changed. Add a new business with the correct income-source type instead.

▼ If you have a duplicate Sage business

First, confirm that updates were sent from the business you are keeping and show as Completed. Then cancel the subscription for the duplicate business.

▼ If you have not sent any updates, or HMRC enrolled you
  1. Check that you have one correctly configured Sage business for every income source HMRC lists.
  2. Add any missing businesses.
  3. Connect each business to the appropriate HMRC income source.
  4. Select the same update period HMRC holds.
  5. Add transactions from the beginning of the tax year.
  6. Send Q2 for each business by 7 November 2026.
  7. Check later that each update shows Completed. 

▼ If an income source had no income or expenses

You still need to submit its quarterly update.

Make sure the income source has its own Sage business and is connected to HMRC. Send Q2 by 7 November 2026. If there has been no income or expenditure since the start of the tax year, the update shows nil figures. Check later that it shows Completed.

▼ If you have several UK rental properties

All UK rental properties count as one UK property income source. For example, three UK rental properties require one UK property business and one quarterly update, not three separate businesses.

▼ If you have overseas property income

Overseas property is a separate income source. Sage does not currently support it, so use other HMRC-recognised software or speak to your accountant.

You can continue using Sage for self-employment and UK property updates.

▼ Add missing transactions

Records need to begin on 6 April 2026, or 1 April 2026 for calendar update periods.

You can:

  • connect a bank feed
  • add missing transactions manually
  • import a CSV, Excel, OFX or QIF bank statement

If a bank feed does not go back to the beginning of the tax year, manually adding the missing transactions is the safest option. Only import a statement for dates the bank feed has not covered. Overlapping dates create duplicate transactions.

 Still think the letter is wrong?

Contact HMRC if:

  • Every income source HMRC holds has an update showing Completed, but you still believe the letter is wrong
  • You have questions about the income sources HMRC holds for you.

When you contact HMRC, provide the income source, quarter and status from the Income Tax summary. Ask HMRC to confirm whether it received and accepted the update.

If you are enrolled in MTD, use the support number in your HMRC welcome letter. Otherwise, contact the HMRC Self Assessment helpline. Sage cannot see or change HMRC’s records.

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