Making Tax Digital for Income Tax (MTD ITSA) sign-up is one of those things that should take 10 minutes but often takes 30 because HMRC's interface is... HMRC's interface.
This guide walks you through every step. No jargon, no guesswork.
Before You Start: Checklist
Gather these before sitting down to register:
| Item | Where to Find It | Notes |
|---|---|---|
| Government Gateway login | Your existing Self Assessment login | If you've never set one up, do this first at gov.uk |
| Unique Taxpayer Reference (UTR) | On your SA250 letter, or previous tax returns | 10-digit number starting with a digit |
| National Insurance number | Payslip, P60, or HMRC letters | Format: AB 12 34 56 C |
| Business start date | When you started trading | The date you registered as self-employed |
| Accounting period | Usually 6 April to 5 April | If you use a different year end, you'll need to specify |
| MTD-compatible software | See software section below | Choose this before signing up — you'll connect it during the process |
Step 1: Check If You Need to Register
You must sign up for MTD ITSA from 6 April 2026 if:
- You're a sole trader and/or landlord
- Your qualifying income exceeded £50,000 in the 2024/25 tax year
Qualifying income = gross income from self-employment + gross property income. It's your turnover before expenses, not your profit.
Examples:
- Sole trader with £55,000 turnover and £20,000 expenses → qualifying income is £55,000 → must register
- Sole trader with £40,000 turnover + landlord with £15,000 rent → qualifying income is £55,000 → must register
- Sole trader with £45,000 turnover → qualifying income is £45,000 → not required until April 2027 (when threshold drops to £30K)
- Limited company director → not required (MTD ITSA applies to sole traders and landlords only)
Not sure? Use our free MTD Readiness Checker to find out in 60 seconds.
Step 2: Choose Your Software First
You need MTD-compatible software before you sign up, because the registration process will ask you to connect it. Here's a quick decision tree:
Already using accounting software?
Check if it's MTD-compatible. Most major providers are:
- ✅ FreeAgent, Xero, QuickBooks, Sage, Kashflow — all MTD-ready
- ✅ HMRC's free MTD software — basic but functional
- ❌ Spreadsheets alone — you'll need bridging software to submit
Not using any software?
Start here:
- Simplest (free): HMRC's own software — basic but costs nothing
- Best value: FreeAgent (free with NatWest/RBS bank account) or QuickBooks Simple Start (£10/month)
- Most popular: Xero (£15/month) — good for growing businesses
- Keep your spreadsheet: Use bridging software (from free to £50/year) to submit your spreadsheet data
Full comparison: MTD Software: Free vs Paid Options Compared (2026)
Step 3: Sign Up for MTD Through Government Gateway
3a. Log into Government Gateway
- Go to gov.uk
- Search for "sign up for Making Tax Digital for Income Tax"
- Click the service link (currently: gov.uk/guidance/sign-up-your-business-for-making-tax-digital-for-income-tax)
- Click "Sign up" or "Start now"
- Log in with your Government Gateway credentials
3b. Confirm Your Details
HMRC will show you the details they hold. Check:
- Your name and National Insurance number are correct
- Your UTR is listed
- Your business type (sole trader, landlord, or both) is correct
If anything is wrong, you may need to update your details via the HMRC helpline before continuing. Don't proceed with incorrect information.
3c. Confirm Your Income Sources
You'll be asked to confirm:
- Self-employment details: Business name, start date, accounting period
- Property income (if applicable): Type of property, start date
If you have both self-employment and property income, you'll set up both sources.
3d. Choose Your Accounting Period
Most sole traders use the standard tax year (6 April to 5 April). If you do, this is straightforward.
If you use a non-standard accounting period (e.g., 1 January to 31 December), note that basis period reform means your 2024/25 tax year will have been a transition year. From 2025/26 onwards, everyone reports on a tax year basis — so your MTD quarters align with the tax year regardless.
3e. Confirm and Submit
Review everything and submit your sign-up. HMRC will process it within 72 hours to 7 working days.
You'll receive confirmation:
- In your Government Gateway account
- Potentially by email if you've set up email notifications
Step 4: Connect Your Software to HMRC
Once your sign-up is confirmed:
- Open your chosen accounting software
- Find the MTD or HMRC connection section (usually in Settings → Tax → Making Tax Digital)
- Click "Connect to HMRC" or "Authorise"
- You'll be redirected to Government Gateway — log in and grant permission
- Your software will confirm the connection is active
Common issues at this stage:
- "MTD sign-up not found" — Your registration may still be processing. Wait 48 hours and try again.
- "Agent authorisation required" — If you have an accountant registered as your agent, they may need to authorise the connection instead.
- Browser issues — The Government Gateway redirect works best in Chrome or Edge. Safari sometimes has cookie/popup issues.
- Two-factor authentication — Make sure you have your phone ready for the Government Gateway 2FA code.
Step 5: Test Before April
Don't wait until Q1 closes to discover something isn't working. In March:
- Enter a test transaction in your software (you can delete it later)
- Check the MTD dashboard — does your software show it's connected to HMRC?
- Review the submission screen — can you see where you'll submit your quarterly update?
- Set up bank feeds if your software supports them — this saves hours of manual entry later
Step 6: Start Recording from 6 April 2026
From the first day of the new tax year, every business transaction needs to be recorded digitally. This means:
- Every payment you receive → logged with date, amount, and source
- Every business expense you incur → logged with date, amount, and category
- Bank feeds do most of this automatically — you just categorise
Your first quarterly update (covering 6 April – 5 July 2026) isn't due until 5 August 2026. So you have a full quarter to get comfortable with the recording process before you need to submit anything.
What If You Miss the April 2026 Deadline?
HMRC has confirmed a penalty grace period for the 2026/27 tax year. This means:
- No late submission penalties for Year 1
- No late payment penalties for Year 1
- Interest on any late tax payments still applies
So if you're reading this in May 2026 and haven't signed up yet — don't panic. Get registered, connect your software, and back-fill your Q1 records. You won't be fined.
But don't rely on this as an excuse. Year 2 penalties apply fully, and getting behind on record-keeping creates a backlog that's much harder to fix later.
Full details: MTD Penalty Grace Period Explained
Timeline: What to Do When
| When | Action |
|---|---|
| Now (March 2026) | Choose software, sign up for MTD ITSA, connect software to HMRC |
| Late March | Test your setup with a sample transaction. Set up bank feeds. |
| 6 April 2026 | Start recording all business transactions digitally |
| 5 July 2026 | Q1 ends. Review your records. |
| 5 August 2026 | Submit your first quarterly update |
| 31 January 2028 | Final declaration for 2026/27 tax year |
Frequently Asked Questions
Can I sign up now even though MTD doesn't start until April?
Yes. In fact, HMRC recommends signing up before April to avoid last-minute issues. The sign-up service is open now.
My accountant handles everything — do I still need to do anything?
Talk to your accountant. They should be handling the sign-up and software connection for you. But check — some accountants are leaving this until the last minute. Ask them: "Are we registered for MTD ITSA?"
I'm voluntarily registered — can I opt out?
If you signed up voluntarily (income under £50K), you can opt out. Contact HMRC to de-register. If you're mandatory (income over £50K), you can't opt out.
What if my income fluctuates around the £50K threshold?
The threshold is based on your 2024/25 tax year qualifying income. If you were over £50K in 2024/25, you must register from April 2026 — even if your 2025/26 income drops below £50K.
I have an accountant but want to do MTD myself — is that possible?
Absolutely. You can sign up as an individual (not through your agent) and submit quarterly updates yourself. Your accountant can still help with the final declaration and year-end adjustments.
📋 MTD Readiness Toolkit — £14
Sign-up checklist, software comparison worksheet, quarterly submission calendar, and first-year planning template. Everything you need to go from "confused" to "compliant" in one afternoon.