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Get started with Making Tax Digital for Income Tax in BrightBooks

Shannon Brady
  • Updated

Work through these steps in order to set up a client for Making Tax Digital for Income Tax and send their first quarterly update from BrightBooks.

 

Steps

  1. Make sure the taxpayer is signed up for Making Tax Digital for Income Tax. Agents: check the client’s authorisation is in your agent services account, and whether you are the main or a supporting agent.
  2. Create the business in BrightBooks with a UK location and the Sole Trader entity type. MTD for Income Tax is only available for Sole Trader businesses.
  3. If the client has self-employment and property income, create one business for each. See Set up a client with self-employment and property income.
  4. Connect the business to HMRC and complete MTD ITSA Setup. See Connect BrightBooks to HMRC for Making Tax Digital for Income Tax.
  5. Choose standard or calendar quarters before the first update. See Choose standard or calendar quarters for Making Tax Digital for Income Tax.
  6. Add the figures for the quarter: enter transactions, use a CSV bank feed or connected bank feed, or use the MTD import template. If HMRC allows the client to use three-line accounting, tick Use simplified 3-line accounting in MTD ITSA Setup.
  7. Generate, check and submit the quarterly update. See Submit your quarterly update and check HMRC has received it.

 

Deadlines, penalties and the final declaration

For quarterly deadlines and penalties, see GOV.UK. BrightBooks sends your quarterly updates. You complete the final declaration in tax software that connects to HMRC, such as BrightTax.

 

Known errors and how to fix them

Find the message you’re seeing:

  • There’s no MTD ITSA option in BrightBooks
  • You can’t find a landlord option when you create a business

 

There’s no MTD ITSA option in BrightBooks

What you’ll see

  • General Ledger doesn’t show MTD ITSA, or MTD ITSA Setup is missing from Settings.

Why it happens

MTD for Income Tax is only available for UK businesses created with the Sole Trader entity type.

How to fix it

  1. Open Settings and check that the business location is the United Kingdom.
  2. Check the business was created as a Sole Trader.
  3. If it wasn’t, create a new business with the Sole Trader entity type and set it up for MTD.

Still not working? Contact us if: you’re sure the business is a UK Sole Trader and the option still doesn’t show.

 

You can’t find a landlord option when you create a business

What you’ll see

  • There’s no “landlord” or “property” entity type when you create the business.

Why it happens

Landlords are set up as Sole Trader businesses. You choose property income in MTD ITSA Setup.

How to fix it

  1. Create the business with the Sole Trader entity type.
  2. Go to Settings (the cog, top right) → MTD ITSA Setup.
  3. Select UK Property (Landlord) or Foreign Property (Landlord) as the Business Type, and select Save.

 

Still need help?

Contact our support team. You’d like a guided walkthrough, or you’ve followed these steps and something still isn’t working – contact our support team with the business name and a screenshot.

 

Find out more on GOV.UK