Making Tax Digital: Quarterly Filing & Your Final Declaration

Making Tax Digital: Quarterly Filing & Your Final Declaration

Once you've connected KinderStart to HMRC (see HMRC Readiness & MTD Authorisation if you haven't yet), the real work of Making Tax Digital begins: four quarterly updates a year, a handful of supporting figures to get right along the way, and — once a year — a legally binding Final Declaration. This guide walks through that whole cycle, screen by screen, with the exact fields and buttons you'll see.

The cycle at a glance

1. Quarterly Update — submit turnover, other income, and expenses for each 3-month period. Four times a year, every year you're MTD-mandated.
2. Supporting figures — Expense Apportionment, Annual Adjustments, Losses, and Dividends feed into your quarterly and year-end numbers as they apply to you. Not all of these apply every year.
3. In-Year Tax Estimate — an optional, non-binding checkpoint you can pull at any time to see roughly where you stand.
4. Final Declaration — once, after your last quarterly update of the year, you formally crystallise your tax position with HMRC. This is the step with real legal weight.

Step 1: The Quarterly Update

Tap a period in Your Obligations to open the Quarterly Update screen (titled Amend Quarterly Update if you're correcting one you've already sent). It has three input fields:

• Turnover (£)
• Other Income (£)
• Consolidated Expenses (£)

KinderStart pre-fills all three by pulling every invoice, expense, and manual income record dated inside the period and running them through a Calculation Breakdown card above the form, so you're rarely typing these numbers from scratch.

How income gets classified

Every invoice line item carries a revenue stream tag, and it's this tag — not any text matching on the description — that decides what HMRC sees:

• Taxable (private fees) — parent-paid fees. Counted in full towards your Turnover figure.
• LA Grant — Local Authority funding. Excluded entirely; it isn't taxable business income, so it never reaches HMRC's Turnover box. You'll see it listed under "LA Funding (not submitted to HMRC)" for transparency, but it doesn't add to the figure you submit.
• Untagged — anything with no revenue stream tag at all.

Manual income records get their own split: anything logged as FUNDING or GRANT is excluded the same way LA funding is; everything else (retainer, top-up, or other) counts as taxable Other Income (SA103F Box 16).

Expenses

Expenses are pulled in per HMRC expense category (their SA103F boxes), with anything KinderStart has already flagged as disallowable left out automatically. Where you've apportioned an expense for business use, only the claimable portion is included — not the full amount.

Checking exactly what you're about to send

Before you submit, tap View full audit trail to open the Audit Trail screen — an HMRC Submission Preview showing Turnover (taxable), Other income, Allowable expenses, and the resulting Net profit, followed by every invoice and expense that fed into those numbers. Anything excluded (LA funding, non-taxable manual income, disallowable expenses) is listed separately under "Excluded (not sent to HMRC)" so you can see exactly what HMRC will and won't see. If any untagged income is in the mix, it's called out here too, with a reminder to review and tag the source invoices.

When you're ready, tap Submit Quarterly Update (or Save Amendment if you're correcting a past one). Success shows a confirmation and takes you back.

If you're filing for the 2025-26 tax year or later, KinderStart also submits a running year-to-date cumulative total to HMRC automatically straight after each quarterly update succeeds — you don't need to do anything for this, it happens in the background.

Getting your expense figure right: Household Apportionment

From the Quarterly Update screen, tap Calculate household apportionment to open the Household Apportionment screen. This is where you work out how much of your household bills you can legitimately claim as a childminding business expense — HMRC gives you two ways to do it, and this screen shows both side by side.

Rooms × Hours (actual cost method)

Under Working Pattern, enter:

• Total Rooms in Home — all habitable rooms, not bathrooms or hallways.
• Rooms Used for Childminding — rooms regularly used during sessions.
• Weekly Childminding Hours — pre-filled from your Tax & Compliance settings if you've set a default.

KinderStart calculates a room ratio (business rooms ÷ total rooms) and an hours ratio (weekly hours ÷ 168 hours in a week, capped at 100%). Under Annual Household Bills, enter yearly totals for Gas/Heating Oil, Electricity, Water, Broadband/Phone, Council Tax, and Buildings Insurance — these are apportioned by the combined ratio (room ratio × hours ratio), since they're running costs tied to both space and time. Rent/Mortgage Interest is apportioned by room ratio only, since it's a fixed cost that doesn't change with your hours.

HMRC's simplified flat rate

Under HMRC Simplified vs Actual, KinderStart compares your actual-cost total against HMRC's official simplified flat-rate deduction, based on your monthly hours worked from home:

Whichever method comes out higher is flagged for you, with the pound difference stated plainly. Neither is "more correct" — HMRC lets you choose either for the year, but you can't mix the two for the same set of costs. A qualified adviser can confirm which is right for your circumstances if you're unsure.

Tap Use this figure to add the period-prorated amount straight into the Consolidated Expenses field back on the Quarterly Update screen. As the screen itself notes: "Estimates only. Consult a qualified tax adviser before filing."

Annual Adjustments: allowances and BSAS

Reached via the Adjustments tile in the MTD Toolbox, this screen has two tabs.

Allowances

Two mutually exclusive options for capital spending:

• Annual Investment Allowance — enter the amount spent on qualifying business equipment (e.g. safety gates, outdoor play equipment) to deduct it in full this year.
• Use Trading Allowance — a flat £1,000 deduction instead, toggled on with a switch.

You can only use one. If you have an Annual Investment Allowance amount entered and switch on the Trading Allowance, KinderStart asks "Activating Trading Allowance will supercede Annual Investment Allowance. Continue?" and clears the AIA figure if you confirm. Trying to submit both set at once is blocked outright: "You cannot claim the Trading Allowance (£1000) and other allowances at the same time."

Tap Submit Allowances to send your choice to HMRC.

Adjustments (BSAS)

BSAS — the Business Source Adjustable Summary — lets you correct your year's totals after your quarterly updates are in, without reopening each individual quarter. You can't submit adjustments straight away: the screen first requires you to tap Start Adjustment Process, which triggers HMRC to calculate a summary from your quarterly submissions and returns a calculation ID. Only once that's triggered can you pick an Adjustment Type — Turnover, Other Business Income, Cost of Goods, Wages & Staff Costs, Car, Van & Travel, Premises Running Costs, Admin Costs, or Goods & Services Own Use — enter an Amount (£), and tap Submit Adjustments.

In practice, you'd trigger a BSAS adjustment when something changes your year's totals after the fact: a turnover correction, a change to wages or staff costs, a premises running cost you missed, or goods/services you took for personal use that need adding back in. Each trigger creates a new calculation you can select from Previous BSAS Calculations to review or continue adjusting.

Loss Management

Reached via the Losses tile. If a year runs at a loss — not unusual in your first year of trading — this screen handles two related but separate things.

Brought Forward Losses

A record of a loss amount from a specific past tax year, entered via + → Loss Amount (£) and a tax-year chip, then Submit to HMRC. Each one can be edited (change the amount) or removed later.

Loss Claims

A claim tells HMRC what to do with a loss. Choosing Type of Claim gives you two options:

• Carry Forward — offset the loss against your childminding profits in future years, reducing the tax you'll owe later.
• Carry Sideways — offset the loss against other income you had in the same tax year (for example if you had employed earnings alongside your childminding business), reducing what you owe now rather than later.

Where you have more than one claim of the same type, up/down arrows let you set the order HMRC applies them in. Existing claims can have their type changed via Edit type, or be removed.

Dividends

Reached via the Dividends tile — a short section that most childminders, trading as sole traders, will never need. It only applies if you separately hold dividend-paying investments or shares. Two categories:

• UK Dividends — a UK Dividends (£) figure and an Other UK Dividends (£) figure.
• General Dividends — a Stock Dividend Gross Amount (£) (plus any foreign dividends already on record).

Each is entered, edited, or deleted independently per tax year, and submitted with Submit Dividends.

Checking in: the In-Year Tax Estimate

Reached via the Tax Estimate tile. Tap Get Tax Estimate to ask HMRC for a real-time projection based on everything you've submitted so far this year — Income Tax, Class 2 NICs, Class 4 NICs, and the total due.

Every estimate you pull is also saved to Calc History (the Calc History tile), alongside every other calculation type — In-Year, Intent to Finalise, Intent to Amend, and Final Declaration — so you can review the full trail of what HMRC calculated and when.

The Final Declaration: crystallising your tax year

This is the one legally binding step in the whole cycle, and it deserves the same care you'd give an accident report or a safeguarding log. Reached from Tax Year Finalisation at the bottom of the Making Tax Digital screen, once your quarterly updates for the year are in.

Step 1: Generate Tax Calculation

Tap Generate Tax Calculation. KinderStart asks HMRC to calculate your final position from everything you've submitted for the year. This usually takes a few seconds; if HMRC needs longer, you'll be told to wait and try again. The screen notes this first result is still an estimate — "This calculation is an estimate and may not be 100% accurate until your final declaration is processed by HMRC" — until you complete step 2.

Step 2: Review & Submit

Once the calculation returns, you see your Total Income Tax & NICs Due, broken down into Income Tax, Class 2 NICs, and Class 4 NICs. Below that is the declaration itself:

"Before you can submit the information displayed here in response to your notice to file from HM Revenue & Customs, you must read and agree to the following statement by checking the box below:"

The checkbox reads, word for word:

"I declare that the information and tax return I have submitted are (taken together) correct and complete to the best of my knowledge. I understand that I may have to pay financial penalties and face prosecution if I give false information."

Submit Final Declaration stays disabled until you've ticked this box. Once submitted, you'll see a Declaration Complete confirmation — your tax year is finalised, and no further action is needed unless something changes.

Amending a finalised return

If you spot an error after finalising, Amend Previous Return (also under Tax Year Finalisation) opens the same screen in amend mode. A warning banner explains what's different:

"Amending a finalised return will reopen your tax position for [tax year]. HMRC may recalculate your liability. A different calculation ID will be issued — do not reuse the ID from the original declaration."

The flow is the same two steps — Generate Amended Calculation, then review and tick the same declaration checkbox before Submit Amendment — but it produces a fresh calculation ID from HMRC rather than reusing your original one, and the confirmation on completion reads Amendment Confirmed rather than Declaration Complete.

That's the full cycle: quarterly updates feeding in your income and expenses as they happen, apportionment and adjustments keeping those figures accurate, the in-year estimate as a no-pressure checkpoint, and the Final Declaration closing the year out formally with HMRC. If you haven't connected KinderStart to HMRC yet, start with HMRC Readiness & MTD Authorisation — everything here assumes that's already done.