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Contents

  1. 1. Do I need to sign up for MTD for Income Tax?
  2. 2. What do I need to register for MTD for Income Tax?
  3. 3. How to register for MTD for Income Tax

How to register for Making Tax Digital for Income Tax

December 1, 2022
Following the completion of the Making Tax Digital for VAT (MTD for VAT) rollout in April 2022, HM Revenue and Customs (HMRC) has turned its attention to Making Tax Digital for Income Tax Self Assessment (MTD ITSA), with the scheme due to launch in April 2024.

In this first rollout, self-employed sole traders and landlords with qualifying income above £10,000 must register, with the scope set to expand to partnerships in 2025.

If you’re in the above categories and need to register — or alternatively, are looking to join on a voluntary basis — you might be wondering how to register for Making Tax Digital for Income Tax.If so, we’ve got you covered. Read on for our step-by-step guide to registering your sole trader or property business for MTD ITSA.
If you’re looking to register for MTD for VAT, you can check out our guide on registering for Making Tax Digital here.

Do I need to sign up for MTD for Income Tax?

Before signing up to MTD ITSA, you’ll first need to make sure you’re eligible to register.As of April 2024, you must comply with the rules for Making Tax Digital for Income Tax if you:
There are, however, a few cases where you won’t be eligible to register, even if you meet the above criteria. For instance, you cannot sign up if you are a:
    Trustee, including charitable trustees or trustees of non-registered pension schemesPersonal representative of someone who has diedMinister of a religion, Lloyd’s underwriter or qualifying carerNon-resident company
Eligibility criteria (must meet all criteria to be eligible)Not eligible to register
Accounting period aligns exactly with the tax year (not 31st March)Income Tax charge (e.g. high income child benefit or pension tax charges)
UK tax residentUnder a specific Self Assessment payment arrangement
Everything up to date (e.g. no outstanding tax returns or liabilities)Partner in a partnership (not until April 2025 at the earliest)
Registered for Self Assessment, with at least 1 tax return submittedMinister of a religion, Lloyd's underwriter or qualifying carer
Have a National Insurance numberUndergoing bankruptcy or insolvency procedures
You've provided HMRC with an up-to-date addressThird party capacitator acting (this doesn't include having an agent)
You’ll also need to make sure you have an accounting period that matches the tax year, running from 6th April to 5th April.

What do I need to register for MTD for Income Tax?

To register for MTD ITSA, you’ll need the following information to hand:
    Your business name and address for self-employment income sources Your Government Gateway ID and password The nature of your business Your business start date or the date you started collecting property income Email address National Insurance number Accounting period Accounting type, such as traditional accounting or cash basis

How to register for MTD for Income Tax

If you meet the eligibility criteria and have everything you need to hand, you’ll now be able to register for Making Tax Digital for Income Tax.There are 2 ways you can register for MTD ITSA: either through an agent, or using MTD-compatible software.
If choosing the latter, you’ll need to make sure you have the accounting software in place before registering for the scheme. You’ll need to make sure your chosen software package enables you to meet the following MTD ITSA requirements:

    Create and store digital recordsSend quarterly updates to HMRC detailing business and rental income and expenses for the quarterConfirm End of Period Statements (EOPS)Make a final declaration
You can find the full list of recognised software providers at GOV.UK.

Alternatively, if you’re not ready to adopt accounting software to store your business records and file your tax returns, you can use spreadsheets and bridging software to stay compliant instead.

Can I register voluntarily for MTD for Income Tax?

If you’re keen to get ahead of the curve, you’re in luck: you can voluntarily sign up to HMRC’s Pilot Scheme for MTD ITSA.However, you can only do so if you:
    Can confirm your details with HMRC are up to dateHave a National Insurance numberAre a UK residentAre already registered for Self AssessmentHave an accounting period that aligns with the tax yearHave submitted at least one Self Assessment tax returnHave a source of income from an existing small business, or property incomeAre up to date with your tax records (e.g. have no outstanding tax liabilities)
Even if the above apply to you, you cannot voluntarily register for MTD ITSA yet if you:
    Need to report income or deductions from other revenue streams, such as employment, pension or student loan repaymentsHave an Income Tax charge (e.g. high income Child Benefit charges)Have a payment arrangementAre a partner in a partnershipAre currently, or will be, bankrupt or insolventAre a Minister of a religion, Lloyd’s underwriter or foster carerAre signing up on behalf of someone else, unless you’re an agent
Rachel Cameron-Potter
Rachel Cameron-PotterContent Marketer

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