MTD Signup Checklist: 5 Steps to Get Ready for Making Tax Digital | MHC & Co

MTD Signup Checklist: 5 Steps to Get Ready

A practical guide on how to prepare for Making Tax Digital, including checking eligibility

MHC & Co MTD Transition Specialists

From April 2026, Making Tax Digital for Income Tax becomes mandatory for sole traders and landlords with income over £50,000 [5]. But signing up isn’t automatic – you must take action [10]. This 5-step checklist will guide you through everything you need to do to prepare, from checking your eligibility to completing your MTD registration.

Step 1: Check Your Eligibility and Start Date

✓ Determine Your Qualifying Income

Your mandatory start date depends on your total gross income from self-employment and property (combined) in previous tax years [5]. This is called your qualifying income – the total before deducting any expenses or taxes [5].

Qualifying Income Threshold	Based on Tax Year	Mandatory From
Over £50,000	2024/25	6 April 2026 [5]
Over £30,000	2025/26	6 April 2027 [5]
Over £20,000	2026/27	6 April 2028 (proposed) [5]

Important: The threshold is cumulative
If you earn £25,000 from self-employment and £25,000 from property, your combined income is £50,000 – you meet the threshold for April 2026 [8].

What’s NOT Included in Qualifying Income:

Employment income (PAYE)
Partnership income [8]
Dividends (including from your own company) [5]
Savings and investment income

HMRC Letters Are Being Sent

HMRC began writing to taxpayers in November 2025 who are required to follow MTD from April 2026 [1]. But if you haven’t received a letter, you’re not off the hook – you must still comply if your income exceeds the threshold [1].

Step 2: Understand What’s Required

Before signing up, you need to understand what MTD for Income Tax actually involves [10].

1. Digital Records

Keep records of all income and expenses digitally [5]

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2. Quarterly Updates

Submit 4 summaries per year to HMRC [5]

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3. Final Declaration

Complete end-of-year statement by 31 January [5]

Quarterly Update Deadlines

You can choose your reporting quarters when you sign up – either following the tax year or calendar quarters [10]. Submissions are due one month and seven days after each quarter ends [8].

Quarter	Period (Tax Year)	Submission Deadline
Quarter 1	6 April – 5 July	7 August
Quarter 2	6 July – 5 October	7 November
Quarter 3	6 October – 5 January	7 February
Quarter 4	6 January – 5 April	7 May

Step 3: Choose Your MTD-Compatible Software

✓ HMRC Won’t Provide Software

HMRC will not be providing any software for digital record-keeping – you must use third-party commercial software [1]. The good news is that some free options will be available from third-party developers for basic needs [8].

Your Software Options

Software Type	Description	Best For
Cloud Accounting (e.g., FreeAgent, Xero, QuickBooks)	Full accounting with bank feeds, receipt scanning, automated submissions [3]	Most businesses wanting an all-in-one solution
Bridging Software	Connects your existing spreadsheet records to HMRC’s API [4]	Spreadsheet users who can’t abandon their current system [8]
Free Basic Software	Simple tools for basic record-keeping and submissions [8]	Those with straightforward affairs

How to Choose:

Check the HMRC-approved software tool on GOV.UK [1]
Consider ease of use, bank feed integration, and support [10]
If you use an accountant, check which software they recommend [3]
Sign up for free trials to test before committing [10]

Multiple Income Sources

If you have more than one qualifying income stream (e.g., two separate trades, or both self-employment and property), you’ll need to:

Sign up each income stream separately with HMRC [3]
Use separate software accounts for each trade and property [3]
Submit separate quarterly updates for each income source [8]

Step 4: Gather Your Information and Credentials

Before you start the signup process, ensure you have the following ready [3][7]:

Information Needed	Where to Find It
Government Gateway login	Create one at GOV.UK if you don’t already have it [3]
National Insurance number	Your NI letter or previous tax returns [3]
Unique Taxpayer Reference (UTR)	Your Self Assessment welcome letter or previous returns
Full name, date of birth, address	As held by HMRC – must match exactly [7]
Business start dates (if within last 2 years)	Your records [7]
Accounting method used (cash or accruals)	Check with your accountant or previous returns [7]

For Accountants: Get Client Authorisation

If you’re an agent signing up clients, you’ll need fresh authorisation for MTD access – existing Self Assessment permissions won’t transfer automatically [10]. Ensure you have your client’s permission before registering them [7].

Step 5: Complete Your MTD Signup

Option A: Sign Up During the Testing Phase (Recommended)

Benefits of Early Signup:

No penalties for late quarterly updates during testing [5]
Dedicated support from HMRC’s MTD Customer Support Team [5]
Time to learn the system before mandatory deadlines [7]
Train staff in a low-risk environment [7]

You can sign up early even if you’re below the threshold – voluntary participation is encouraged [8].

The Signup Process

1. HMRC Signup

Visit GOV.UK MTD sign-up page [3]

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2. Enter Details

Provide NI number, business info, choose start year [7]

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3. Confirm Income Sources

Add each self-employment and property source [7]

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4. Connect Software

Link your chosen software to HMRC [3]

Detailed Steps:

Visit HMRC’s MTD for Income Tax sign-up page on GOV.UK [3]
Log in with your Government Gateway credentials [7]
Enter your client’s (or your) details – full name, date of birth, National Insurance number [7]
Confirm eligibility – the system will check and confirm you can sign up [3]
Select when you want to start – choose the pilot year (2025/26) or in readiness for 2026/27 [6]
Add each income source – one at a time, confirming start dates and accounting method [7]
Check your answers and confirm [6]
Receive confirmation from HMRC that you’ve successfully signed up [3]

Connecting Your Software

Once you’ve received confirmation from HMRC, you need to connect your software [3]:

In your software, navigate to HMRC connections (usually under Settings or Connections) [3]
Select “Connect to HMRC for Income Tax” [3]
Enter your National Insurance number if prompted [3]
You’ll be redirected to HMRC to authorise the connection – log in with your Government Gateway [3]
If you have multiple income streams, select which one to link to this software account [3]
Once connected, you can start submitting quarterly updates [3]

Connection Expiry

HMRC requires you to update your MTD connection every 18 months. Your software should warn you when it’s expiring [3].

Exemptions: Who Doesn’t Need to Sign Up?

You may be exempt from MTD if you are digitally excluded – meaning it’s not reasonable for you to use software to keep digital records or submit them to HMRC [1]. This could be due to age, disability, remoteness of location, or religious beliefs [1].

Exemptions are not automatic – you must apply to HMRC in writing or by phone [1]. Simply stating your age is not enough; you need to provide full context of your circumstances [8].

Some groups are automatically exempt for now, including foster carers [8].

Your Complete Signup Checklist

☐ Step 1: Eligibility Check

☐ Check your 2024/25 gross income (self-employment + property) [5]
☐ Confirm your mandatory start date [5]
☐ If under threshold, consider voluntary early signup [8]

☐ Step 2: Understand Requirements

☐ Know what digital records you’ll need to keep [5]
☐ Understand quarterly update deadlines [8]
☐ Decide on your preferred reporting quarters [10]

☐ Step 3: Choose Software

☐ Research HMRC-approved software options [1]
☐ Test free trials [10]
☐ Consider bridging software if using spreadsheets [8]
☐ Check compatibility with your accountant [3]

☐ Step 4: Gather Information

☐ Government Gateway login [3]
☐ National Insurance number [3]
☐ UTR [7]
☐ Business start dates [7]
☐ Accounting method [7]

☐ Step 5: Complete Signup

☐ Sign up on GOV.UK [3]
☐ Receive confirmation from HMRC [3]
☐ Connect your software to HMRC [3]
☐ Test a practice submission (if in pilot) [7]
☐ Set calendar reminders for quarterly deadlines [10]

Need Help with Your MTD Signup?

Whether you’re in the first wave (April 2026) or preparing for future years, our team can guide you through every step of the signup process. We’ll help you check your eligibility, choose the right software, and complete your registration correctly.

Book Your MTD Signup Consultation

References

1. Low Incomes Tax Reform Group. (2025). HMRC write to taxpayers about Making Tax Digital. Available at: https://www.litrg.org.uk/news/hmrc-write-taxpayers-about-making-tax-digital []
2. Business Wales. (2025). Making Tax Digital 2026. Available at: https://businesswales.gov.wales/news-and-blog/making-tax-digital-2026 []
3. FreeAgent. (2025). Connect to HMRC for Making Tax Digital for Income Tax. Available at: https://support.freeagent.com/hc/en-gb/articles/5119595379346-Connect-to-HMRC-for-Making-Tax-Digital-for-Income-Tax []
4. Zempler Bank. (2025). MTD Checklist for Small Businesses. Available at: https://www.zemplerbank.com/resources/tax/mtd-checklist/ []
5. GOV.UK. (2025). Use Making Tax Digital for Income Tax – Introduction. Available at: https://www.gov.uk/guidance/use-making-tax-digital-for-income-tax/introduction []
6. TaxCalc. (2025). MTD for income tax – Agent journey for signing up clients with HMRC. Available at: https://kb.taxcalc.com/index.php?View=print&EntryID=3416 []
7. AccountingWEB. (2025). How to sign up for MTD for Income Tax. Available at: https://www.accountingweb.co.uk/community/industry-insights/how-to-sign-up-for-mtd-for-income-tax []
8. ETC Tax. (2025). Making Tax Digital (MTD) for Self Assessment. Available at: https://etctax.co.uk/making-tax-digital-self-assessment/page/6/?et_blog []
9. QuickFile. (2025). Joining the Making Tax Digital (MTD) for Income Tax and Self Assessment Pilot Scheme. Available at: https://support.quickfile.co.uk/t/joining-the-making-tax-digital-mtd-for-income-tax-and-self-assessment-pilot-scheme/60536 []
10. Churchgates. (2026). Get ready for Making Tax Digital for Income Tax. Available at: https://churchgates.co.uk/get-ready-for-making-tax-digital-for-income-tax/ []