This article answers common questions about using MTD ITSA (Making Tax Digital for Income Tax Self Assessment) in BrightBooks, including authorisation, setup, importing figures, and submitting quarterly returns.

1. How do I get HMRC authorisation for MTD ITSA and connect BrightBooks?

Q: What needs to happen before BrightBooks can submit MTD ITSA quarterly returns to HMRC?

Before BrightBooks (or any MTD‑compatible software) can send quarterly updates, HMRC must authorise the connection between:

• The taxpayer/agent, and
• The software being used.

This is done via an HMRC authorisation process.

Steps:

1. Complete HMRC’s authorisation form
   • Use the HMRC template provided (e.g. LSI Template.docx) as instructed by HMRC.
   • Submit this form to HMRC as the accountant/agent.

2. Once HMRC authorisation is granted, you can connect BrightBooks:

    
   • Open BrightBooks and click into the relevant business for the MTD ITSA client.
   • From the left-hand toolbar, click General Ledger.
   • At the top of the screen, click MTD ITSA.
   • A pop‑up window will appear prompting you to connect to HMRC – follow the on‑screen identification process (you will need two forms of ID).
   • After granting permission, a second window will appear advising that setup is not yet complete – close this window.
   • Click the cog wheel in the top‑right corner to go to Settings, then scroll down to MTD ITSA Setup.
   • Enter the client’s National Insurance number; this will auto‑populate their MTD Tax ID number.
   • Use the Tax Year dropdown to select the appropriate tax year and click Save.
    

   Once this is done, the connection process to HMRC for MTD ITSA submissions is complete.

Q: What if I get an error when saving the National Insurance number?

If you see an error when trying to save the National Insurance number in MTD ITSA Setup, this usually indicates:

• Your HMRC account is connected to the software,
• But not yet authorised by HMRC for MTD ITSA.

In that case, revisit Step 1 (HMRC authorisation) and ensure the authorisation process has been fully completed and confirmed by HMRC.

2. How do I handle clients with both self‑employment and UK property income?

Q: My client has both self‑employment income and UK property income. How should I set them up in BrightBooks for MTD ITSA?

Under MTD ITSA, BrightBooks supports digital record‑keeping and quarterly submissions for different income types. When a client has both self‑employment income and UK property income, these must be managed as separate MTD business accounts.

Each BrightBooks business can only be set to one MTD income type:

• Either Self-Employed
• UK Property, or
• Foreign Property.

Setup requirements:

1. Create two BrightBooks business records for the same client:
   • One business for Self‑Employment.
   • One business for UK Property.
2. Assign the correct MTD type to each business:
   • Go to Settings > MTD Tax Setup in the relevant business.
   • For the self‑employment business, select Self-Employed.
   • For the property business, select UK Property.

Each business will then hold its own digital records and quarterly submissions for the relevant income type.

3. Which business entity type do I need to use for MTD ITSA?

Q: Why can’t I see MTD ITSA options for a business I’ve created?

MTD ITSA functionality is only available when the business is created as a Sole Trader. It must also be a UK Business.

If the business entity type is not set to “Sole Trader” when you first create the business in BrightBooks, MTD ITSA functionality will not be available for that business. The MTD ITSA tools (digital records and quarterly submission options for self‑employment and/or UK property) are only enabled for Sole Trader entities.

To ensure MTD ITSA is available:

• When creating a new business, always select “Sole Trader” as the business entity type.
• If a business was created with a different entity type, you may need to create a new business record as Sole Trader to access MTD ITSA features.

4. How do I import figures for an MTD ITSA quarterly return?

Q: What are my options for loading transactions into BrightBooks for an MTD ITSA quarter?

You can load transactions into BrightBooks using:

1. MTD ITSA Quarterly Return Import (Template method)
2. Bank feed options (CSV upload or automatic bank feed)

4.1 MTD ITSA Quarterly Return Import (Template)

Steps:

1. Go to Settings.
2. Under Data, select Imports.
3. Highlight MTD ITSA Quarterly Return Import and click Next.
4. A sentence will appear containing a hyperlink on the word “Template” – click this to download the CSV template.
5. Open the template and copy and paste the relevant transactions from your own spreadsheet into the template, following the column structure provided.
6. Once complete, return to the same import screen and drag and drop the finished CSV file to upload the transactions.

4.2 Bank Feed Options

You can also use bank feeds to bring transactions into BrightBooks:

• CSV bank feed upload
  • Upload a CSV file containing your bank transactions.
  • Map the columns as required during the import process.
• Automatic bank feed
  • Connect your bank for an automatic feed.
  • Transactions will flow directly into BrightBooks.
  • Allocate these transactions to the appropriate accounts so they form the basis of your MTD ITSA quarterly figures.

5. How do I submit an MTD ITSA quarterly return?

Q: Once my transactions are loaded, how do I generate and submit the quarterly MTD ITSA return?

Steps:

1. Ensure all transactions for the quarter are correctly loaded and dated within the relevant period.
2. Navigate to General Ledger in the left‑hand toolbar.
3. Click MTD ITSA at the top of the screen.
4. You will see a list of the four quarterly periods available for submission.
5. Hover over the relevant period, then use the dropdown menu to the right and click Generate to create the figures for that quarter.
6. After generation, use the same dropdown and click Print or Preview to review the figures.
7. Once you are satisfied that the figures are correct, use the dropdown again and select Submit MTD Return.

This action uploads the quarterly MTD ITSA return to HMRC.

6. How should CIS income be treated in an MTD ITSA quarterly submission?

Q: How do I handle CIS (Construction Industry Scheme) income in an MTD ITSA quarter?

For CIS transactions in an MTD ITSA quarterly submission, you should use the gross amount (the full amount before CIS tax deduction), not the net paid after deduction.

In practice:

• Record the gross income from the contractor as your turnover for the period.
• Record the CIS tax deducted separately (e.g. as tax suffered / credit against Income Tax), rather than reducing the income figure.

This ensures the MTD ITSA submission reflects the correct gross trading income, with CIS deductions treated as tax credits, not as a reduction of income.

7. What does “Nominal not existing” mean when importing figures?

Q: I’m getting an error saying a nominal does not exist when importing my MTD ITSA template. What should I do?

If you receive an error that a nominal does not exist when importing figures, it usually means the required nominal codes are missing from your Chart of Accounts.

For MTD ITSA quarterly imports, you need to ensure nominals 362 and 473.01 exist.

Steps to create the missing nominals:

1. Go to General Ledger > Chart of Accounts > New.
2. Account group – click the magnifying icon and select any appropriate group.
3. Account code – enter the required code (e.g. 362 or 473.01).
4. Description – enter a suitable description (e.g. “Income” or “Expenses”).
5. Copy from code – click the magnifying icon and select any existing nominal to copy its settings.
6. Save the new nominal.

Once these nominals are created, you can re‑import your template and the import should complete successfully.

8. Why are my imported figures not appearing when I generate the MTD quarter?

Q: My import was successful, but when I click Generate on the MTD quarter, the figures don’t appear. Why?

If the import completed successfully but the figures are not appearing in the generated MTD quarter, the most common cause is that the journal dates are outside the quarter’s date range.

Steps to check and fix:

1. Go to General Ledger > Journals.
2. Locate the journal(s) created by your import.

3. Check the date on each journal.

   • Ensure the date falls within the date range of the quarter you are running the return for.
    
4. To change a date:
   • Click the date – this opens the journal.
   • Adjust the date to the correct period.
   • Click Save.

Once the journal dates are within the correct quarter, your figures should appear when you Generate the MTD ITSA return for that period.