Checklists

Making Tax Digital for Income Tax (MTD ITSA) – Accountant Checklist

A comprehensive digital compliance checklist for accountants, offering client-specific oversight and streamlined task management to meet MTD Income Tax requirements with confidence.
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Making Tax Digital for Income Tax (MTD ITSA) Accountant/Agent Checklist

1. Check if your client needs to sign up

☐Confirm client is registered for Self-Assessment. ☐Confirm client earns income from self-employment, property, or both. ☐Check client’s gross qualifying income:
    • Over £50,000 → Must start from 6 April 2026.
    • Over £30,000 → Must start from 6 April 2027.
☐Exclude income from:
    • Employment (PAYE).
    • Partnerships (unless disguised management fees apply).
    • Dividends, savings, pensions, etc.
☐Apply UK tax residence rules properly.

2. Work out your client’s qualifying income

☐Include gross self-employment income and gross property income. ☐If property is jointly owned, include only client’s share. ☐If client uses cash basis and is VAT-registered, confirm if VAT is included or excluded. ☐Adjust qualifying income if client has part-year trading (annualised gross income).

3. Create your Agent Services Account (ASA)

☐Register for an Agent Services Account if you don’t already have one. ☐You must be:
    • A director, partner, or sole trader of the firm.
☐Gather:
    • Firm’s UTR, postcode, Companies House number (if any), VAT number (if any), and anti-money laundering details.
☐Keep your Agent Services Account (ASA) credentials safe and distinct from HMRC online services login.

4. Get compatible software

☐Find MTD ITSA-compatible software that can:
    • Create, store, and correct digital records.
    • Send quarterly updates to HMRC.
    • Submit final tax returns.
☐Confirm if software supports:
    • Calendar periods if accounting year is 1 April–31 March.
    • Multiple income sources (self-employment, UK property, foreign property).
☐If using spreadsheets, arrange bridging software. ☐Check that software supports submission of client’s other income sources (savings, dividends) if needed.

5. Prepare client authorisation

☐Get client’s permission to sign them up for MTD ITSA. ☐If already authorised for Self Assessment:
    • Link client to ASA if necessary.
☐If not authorised yet:
    • Request digital authorisation through your ASA.

6. Sign up your client for MTD ITSA

☐Check client eligibility (must meet voluntary sign-up conditions if signing up early). ☐Gather client details:
    • Full name, date of birth, NI number.
    • Business name, address, start date, nature of trade (if sole trader).
    • Accounting method (cash or traditional).
☐Complete sign-up through your Agent Services Account portal. ☐Ensure client software is connected and authorised to interact with HMRC.

7. Create and maintain client’s digital records

☐Maintain digital records for:
    • Self-employment income and expenses.
    • Property rental income and expenses.
☐If joint property income:
    • Record client’s share separately.
    • Optionally simplify quarterly updates (aggregate joint property income).

8. Send quarterly updates

☐Ensure updates are submitted for each business/property every 3 months:
    • 6 April–5 July → Deadline 7 August
    • 6 April–5 October → Deadline 7 November
    • 6 April–5 January → Deadline 7 February
    • 6 April–5 April → Deadline 7 May
☐Choose standard or calendar update periods based on accounting period. ☐Submit nil returns if client had no income or expenses for the period.

9. Adjust at year-end

☐After the 4th update:
    • Apply tax adjustments (disallowable expenses, private use).
    • Apply accounting adjustments (prepayments, accruals).
    • Adjust for 1–5 April if using calendar periods.
    • Apply relevant reliefs (e.g., capital allowances, trading allowance).

10. Finalise and submit client’s tax return

☐Confirm all income sources are declared (business + personal). ☐Finalise Income Tax position in the client’s MTD-compatible software. ☐Submit full tax return via software by 31 January following tax year-end.

11. Ongoing compliance

☐Retain all digital records for at least 5 years after 31 January deadline. ☐Monitor client’s payments on account (if applicable). ☐Stay alert to:
    • Changes in client’s business circumstances.
    • Exemptions or opt-outs (if circumstances justify).
☐Support client with amendments if mistakes are discovered. ☐Update client’s details and software authorisation when needed.

⭐ Important Special Situations for Agents

Situation What to Do
Client joins after 6 April 2026 Start MTD only after filing their first Self Assessment return.
Clients with turnover under £30,000 Not yet mandatory (future timeline pending).
Client ceases self-employment/property letting Update HMRC via online services.
Bridging software users Maintain strict digital links without manual copy-paste.
Testing phase sign-ups No quarterly update penalties during the 2025–2026 test year.

📌 Agent Summary Flow

  1. Confirm client’s eligibility.
  2. Create and secure Agent Services Account (ASA).
  3. Set up compatible software.
  4. Request client authorisation.
  5. Sign up client via ASA.
  6. Create ongoing digital records.
  7. File quarterly updates.
  8. Make year-end adjustments.
  9. Submit final tax return.
  10. Manage compliance, payments, and changes.

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Frequently Asked Questions

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Explore our FAQs to learn how FigsFlow simplifies your workflows and boosts efficiency.

Is this engagement letter template compliant with the Economic Crime (Transparency and Enforcement) Act 2023?

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