31 March Year End? Set Calendar Periods Before Your First MTD Update

The accounting-period choice has a deadline of its own

Compatible MTD for Income Tax software defaults to an accounting period aligned to the tax year: 6 April to 5 April. If your accounts run from 1 April to 31 March, HMRC says you need to select calendar update periods in the software before sending the first quarterly update.¹

This is a setup decision worth checking early. HMRC says the accounting period cannot be changed after a quarterly update has been sent.¹ A taxpayer or agent who assumes the default is harmless can therefore turn a straightforward records setting into a year-end adjustment issue.

Why 31 March is treated differently

MTD for Income Tax follows the tax year, while some businesses prepare accounts to 31 March. Calendar update periods are designed for the 1 April to 31 March accounting period. HMRC says a person starting MTD in 2026/27 who selects calendar periods will not need a special adjustment after that year simply because of the 1-to-5 April difference.²

That does not mean every non-5-April year end works the same way. HMRC’s guidance distinguishes between 31 March, 1 to 4 April, and other accounting dates. For dates that do not align with the tax year, the annual figures may need adjustments so that totals match the accounting period and the relevant rules are applied.³

A pre-submission checklist

Before the first update, confirm all four points:

1. The accounts really run 1 April to 31 March. Do not select calendar periods merely because March is close to the tax year.
2. The setting is visible in the software. HMRC says this should be checked before creating digital records and sending an update.
3. The software supports the selected period. HMRC’s software guidance says the product should work with the chosen accounting period, whether that is the standard tax year or calendar update periods.⁴
4. The agent and client agree on the setting. An agent can help with the process, but the figures and period should not be guessed from historic working papers.

Keep the distinction between updates and the final return

Quarterly updates report digital-record totals. The final tax return is still where the annual position is checked and other information, claims and adjustments are addressed. A 31 March accounting period does not change that division of work; it changes how the update periods should be configured.

If the first update has not been sent, this is the moment to check. If it has been sent with an unexpected setting, do not assume a later update can simply switch the period. Review HMRC’s guidance and the software’s support path, then obtain professional advice where the facts need a specific accounting adjustment.