Mistakes happen. MTD is designed to handle them gracefully, arguably more forgivingly than old-style Self Assessment. Here's how the correction model works and what you should actually do when you spot something wrong.
The core idea
Every quarterly update to HMRC is cumulative, it includes your figures from 6 April up to the end of the latest quarter, replacing any previous update for the same tax year.
This has a very useful consequence: you don't need to file amendments to a previous quarter. If you spot a mistake in Q1, you just correct it in your records and the next update (Q2, Q3 or Q4) will carry the corrected figure automatically.
What that looks like in practice
Imagine you forgot a £500 invoice in Q1:
- Q1 update (filed on 7 August): reported £10,000 income for the year to 5 July.
- October: you realise the £500 invoice from June was missed. You add it to your records.
- Q2 update (filed on 7 November): now reports £18,000 income for the year to 5 October. That figure automatically includes the missed £500, so HMRC's view is now correct.
- No amendment needed, no form to file, no penalty for the fix.
Same principle for errors in the other direction, if you recorded something twice and spot it later, deleting the duplicate before the next update will flow through naturally.
Mistakes in the final declaration
The final declaration is different. Once you've submitted it, you're telling HMRC "this is my final position for the year", so fixing it needs a formal amendment.
You have:
- Up to 12 months after the filing deadline to submit an amendment to the final declaration. For the 2026-27 tax year (due 31 January 2028), the amendment window runs to 31 January 2029.
- Longer for an "overpayment relief claim" if you find you paid too much tax, generally up to 4 years after the end of the tax year.
If you realise you under-paid, disclose promptly, interest runs from the original due date, but penalties are usually much lower (or nil) when you come forward voluntarily before HMRC finds it.
An example
Scenario: a sole trader submits all four quarters of 2026-27, files the final declaration in November 2027, then in March 2028 realises a rental expense was wrongly claimed against their self-employment business.
- Before 31 January 2029 (12 months after the filing deadline): amend the final declaration through your software. Pay any difference (or claim any refund). Standard rate of interest applies if they underpaid; no penalty for a good-faith error corrected voluntarily.
- After 31 January 2029: use an overpayment relief claim (if overpaid) or make a disclosure (if underpaid). Your software will still accept amendments for some period, but the process is more involved.
What if I've been using different software?
If you switched software mid-year, your new software will pull the year-to-date totals from HMRC automatically when you connect. Any correction you make in the new software goes into the next cumulative update, which supersedes whatever the old software submitted.
So: switching doesn't lose the audit trail, and it doesn't require you to re-file any past quarter.
What happens if HMRC disagrees with you?
HMRC can query your figures or open an enquiry, usually within 12 months of the filing deadline but longer in some circumstances. If that happens:
- Don't ignore the letter.
- Provide the records they ask for (this is what those original receipts and bank statements are for, see Keeping digital records).
- If you disagree with their view, you have formal rights to reconsider, appeal, and, ultimately, tribunal. Most enquiries are resolved well before that.
Honest mistakes, corrected promptly, usually end quietly. Deliberate misstatement is treated very differently.
Kite-specific behaviour
If you use Kite, the app keeps a visible history of every correction you make to a transaction in a submitted quarter. You'll see:
- A "Corrected" marker on the transaction.
- A timeline showing when the change was made, by whom, and what changed.
- A "corrections pending" indicator on upcoming quarterly updates, so you know the next submission will carry the fix.
This isn't required by HMRC (HMRC only stores the current totals), but it's very useful when you or your accountant need to reconstruct what changed and when.
Summary
- Quarterly update mistakes: fix the record, carry on; the next cumulative update carries the correction.
- Final declaration mistakes: amend within 12 months of the filing deadline, or use the overpayment-relief / voluntary-disclosure routes after that.
- Keep your original records so you can evidence anything if HMRC asks.
- HMRC's default posture on good-faith errors is "fix it and pay", not "fine you".