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Deadlines and penalties
MTD for Income Tax checklist for accountants: moving one client in, income test to first update
26 steps to move one client into MTD for Income Tax: the income test, agent access, sign-up details, software, records dates and the first quarterly update.
Moving a client into Making Tax Digital for Income Tax is more than the sign-up screen. Someone has to decide whether the client is in, get the practice's access at HMRC in place, collect the details HMRC asks for, set up software and records dates, and send the first update. GOV.UK spreads this over several pages. This list puts it in order for one client, from the income test to the first quarterly update, with the rule behind each step. Use it now for clients over £50,000, and again for the clients over £30,000 who join on 6 April 2027.
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MTD for Income Tax client checklist
Tick each step as it is done. The ticks are kept in this browser only, so you can come back to the list; nothing is sent anywhere.
A working list, not a certificate and not advice: the rule behind each step, with its source, is set out below.
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Is the client in, and from when
Add up gross self-employment and property income on the 2024 to 2025 return. Qualifying income is self-employment and property income before expenses, added together. Over £50,000 for 2024 to 2025 means the client has been in since 6 April 2026. A landlord with £28,000 of rent and a £24,000 side business is over. Source: GOV.UK, Check if you're eligible for Making Tax Digital for Income Tax. The working is in MTD for Income Tax deadline checker.
Under £50,000: check the 2025 to 2026 figure against £30,000 and plan for April 2027. Over £30,000 in 2025 to 2026 brings the client in from 6 April 2027, and over £20,000 in 2026 to 2027 from 6 April 2028. Clients between £30,000 and £50,000 join in six months and are the ones who have heard nothing about it. Source: GOV.UK, Check if you're eligible for Making Tax Digital for Income Tax. The working is in MTD for Income Tax.
Check whether the client is exempt before you go any further. Exemptions exist, for example for people who are digitally excluded, and have to be applied for. Settle this first: an exempt client does not sign up, and the rest of this list assumes no exemption. Source: GOV.UK, Check if you're eligible for Making Tax Digital for Income Tax. The working is in MTD for Income Tax deadline checker.
Confirm the client is registered for Self Assessment and has filed a return in the last 2 years. GOV.UK sets both as conditions for signing a client up. A client who fails either cannot be signed up until they have registered or filed. Source: GOV.UK, Sign up your client for Making Tax Digital for Income Tax. The working is in How to sign up a client for MTD for Income Tax as an agent.
Client below every threshold: decide whether to volunteer them. A client below the threshold can volunteer for the current tax year or the next. For tax years after 2026 to 2027 each missed deadline earns a penalty point, so a volunteer who cannot keep records takes on that risk early. Source: GOV.UK, Sign up your client; Penalties for Making Tax Digital for Income Tax. The working is in How to sign up a client for MTD for Income Tax as an agent.
The practice's access at HMRC
Confirm the practice has an agent services account. It is a different account from HMRC online services for agents, and a client can be signed up only from it. HMRC rejects an application where anti-money-laundering supervision has been applied for but not yet approved. Source: GOV.UK, Apply for an agent services account. The working is in How to sign up a client for MTD for Income Tax as an agent.
Practice still waiting for HMRC supervision: allow up to 45 days before applying. HMRC says its review of a new supervision application can take up to 45 days, and longer if it has to ask for information. Only then apply for the agent services account. Source: GOV.UK, Register or renew your money laundering supervision with HMRC. The working is in HMRC AML supervision for accountants and bookkeepers.
Add each Self Assessment agent code to the agent services account. HMRC recognises existing Self Assessment authorisations for MTD once the agent code has been added. The screen lists agent codes, not clients, and a practice with more than one code repeats the step. Adding a code signs no client up. Source: GOV.UK, Add your client authorisations for Making Tax Digital for Income Tax. The working is in How to sign up a client for MTD for Income Tax as an agent.
No authorisation yet: send the client an authorisation request link. The client signs in with their own details to accept the request. The link expires after 21 days, and an agent must never sign in with a client's credentials. Source: GOV.UK, Authorise an agent for taxes that use the digital handshake. The working is in How to sign up a client for MTD for Income Tax as an agent.
Chase the link on day 7 and day 14, and send a new one if it lapses. A request sent on Monday 5 October 2026 expires on Monday 26 October. One sent after 17 October does not expire until after the 7 November update deadline, so an ignored link can run straight past it. Source: GOV.UK, Authorise an agent for taxes that use the digital handshake. The working is in How to sign up a client for MTD for Income Tax as an agent.
Sign the client up
Collect the client's full name, date of birth and National Insurance number. The sign-up asks for these for every client. A sole trader also gives the business name as it appears on invoices, the business address and the trade. Source: GOV.UK, Sign up your client for Making Tax Digital for Income Tax. The working is in How to sign up a client for MTD for Income Tax as an agent.
Note the start date of any income source begun in the last 2 tax years, and any that has ceased. The sign-up asks for the start date of each business or property income source started within the last 2 tax years, and for any income source that has ceased since the last return. Source: GOV.UK, Sign up your client for Making Tax Digital for Income Tax. The working is in How to sign up a client for MTD for Income Tax as an agent.
Sign the client up from the agent services account and check each income source shown. Sign-up is done one client at a time, with the agent services account user ID. Check every income source the service shows and add any that are missing. Source: GOV.UK, Sign up your client for Making Tax Digital for Income Tax. The working is in How to sign up a client for MTD for Income Tax as an agent.
HMRC signed the client up itself: check the authorisation, the UTR and that MTD has been added. From September 2026 HMRC signs up, in stages, anyone who must use the service for 2026 to 2027 and has not signed up, using only the returns it holds. Search for the client by UTR and check the income sources HMRC recorded. Source: GOV.UK, Check what to do if HMRC has signed you up for Making Tax Digital for Income Tax. The working is in How to sign up a client for MTD for Income Tax as an agent.
All income has ceased: update the client's information straight away. If all income ceased before 6 April 2026 the client does not use the service but still files the 2025 to 2026 return. If it ceased on or after that date, a quarterly update up to the date of cessation is still due. Source: GOV.UK, Check what to do if HMRC has signed you up for Making Tax Digital for Income Tax. The working is in How to sign up a client for MTD for Income Tax as an agent.
Software, records and fees
Authorise the client's compatible software and check the accounting period in it. Quarterly updates are sent from compatible software. Authorise it and check the accounting period before anything is sent, including any updates already missed for the year. Source: GOV.UK, Sign up your client for Making Tax Digital for Income Tax. The working is in How to sign up a client for MTD for Income Tax as an agent.
Choose standard quarters or calendar quarters. Standard periods run from 6 April. A client whose accounts run 1 April to 31 March can elect calendar quarters instead, such as 1 April to 30 June, with the same four deadlines. Source: GOV.UK, Send quarterly updates. The working is in MTD for Income Tax deadline checker.
Give the client a records date 18 days after each period ends. For standard quarters that is 23 July, 23 October, 23 January and 23 April, which leaves the practice 15 days before the 7th. A client who sends records on the deadline leaves none. Source: GOV.UK, MTD quarterly update deadlines; our records policy. The working is in How to stop clients sending records late.
Connect the bank feed and receipt capture before the first period ends. With a bank feed into Xero, QuickBooks or FreeAgent and a receipt-capture app on the client's phone, records arrive as the client spends and the quarterly request shrinks to anything not on the feed. Source: our records policy. The working is in How to stop clients sending records late.
Agree how the four updates are paid for and put it in the engagement letter. Three approaches are common: a quarterly fee per client, a higher annual fee, or a records charge when the client misses the practice's date. At 90 minutes an update, 120 clients come to 720 hours a year. Source: our worked example of the quarterly workload. The working is in MTD for Income Tax.
The first update and the year after
Send any quarterly updates already missed for this tax year. HMRC will not apply penalty points for late quarterly updates in 2026 to 2027, but the updates still have to be sent: the final quarterly update must be in before the tax return can be submitted. Source: GOV.UK, Penalties for Making Tax Digital for Income Tax. The working is in How to sign up a client for MTD for Income Tax as an agent.
Diary the four deadlines: 7 August, 7 November, 7 February and 7 May. Each update is due on the 7th of the month after the period ends. The update for the period from 6 April to 5 October 2026 is due by 7 November 2026. Source: GOV.UK, Send quarterly updates. The working is in MTD for Income Tax deadline checker.
Send the first records request the day the period ends, then a reminder and a final letter. Our sequence sends the reminder 14 days before the filing deadline and the final letter at 7 days, which leaves the practice a working week. Keep the date of each letter on the client file. Source: our three-letter sequence. The working is in Records request letter template for accountants.
Report each update as year to date, and correct an earlier quarter in the next one. Updates are cumulative: the second reports the year to 5 October, not the three months since July. A mistake in an earlier quarter is corrected in the next update, not by amending the old one. Source: GOV.UK, Send quarterly updates. The working is in MTD for Income Tax deadline checker.
File the 2025 to 2026 Self Assessment return by 31 January 2027 as usual. Signing up does not change this return. It is due by 31 January 2027 under the old penalty rules: £100 the day after the deadline, then £10 a day from three months late. Source: GOV.UK, Self Assessment tax returns: penalties. The working is in Self Assessment late filing and late payment penalty calculator (2026 rates).
Tell the client how penalty points work from the 2027 to 2028 tax year. Each missed quarterly update or return deadline earns one point. Four points is a £200 penalty, with £200 more for each deadline missed after that, and a point below the threshold is removed 24 months after the missed deadline. Source: GOV.UK, Penalties for Making Tax Digital for Income Tax. The working is in MTD for Income Tax deadline checker.
How to use the list
Keep one ticked list on each client's file, dated. Where a step did not apply, such as agent codes that were already added, tick it and move on. The steps in the last group repeat every quarter, so once the client is in, copy the four deadlines and the three records letters into the practice diary. If a client later asks why an update was late, the list and the dated letters show what the practice asked for and when.
A ticked list is a record that the steps were done, not proof that each was done properly. The list covers the points our guides and the official pages named above set out; it is not every duty a firm has. This page is general information, not legal advice.
Overlyft sets up AI assistants for accountancy practices: they prepare drafts for a person to approve. They do not tick off any of these steps for you, and you can do every one without them.
Short answers from this page
What are the steps to move a client into Making Tax Digital for Income Tax?
Our checklist has 26 steps in five stages: deciding whether the client is in, the practice's access at HMRC, the sign-up, software and records dates, and the first update. Signing the client up is step 13. The shortest clock is HMRC's 21-day authorisation link: one sent after 17 October 2026 is still open when the 7 November update falls due.
Source: GOV.UK Making Tax Digital for Income Tax guidance, as set out in our checklist
Where this comes from: GOV.UK, Check if you're eligible for Making Tax Digital for Income Tax; GOV.UK, Sign up your client for Making Tax Digital for Income Tax; GOV.UK, Sign up your client; Penalties for Making Tax Digital for Income Tax; GOV.UK, Apply for an agent services account; GOV.UK, Register or renew your money laundering supervision with HMRC; GOV.UK, Add your client authorisations for Making Tax Digital for Income Tax; GOV.UK, Authorise an agent for taxes that use the digital handshake; GOV.UK, Check what to do if HMRC has signed you up for Making Tax Digital for Income Tax; GOV.UK, Send quarterly updates; GOV.UK, MTD quarterly update deadlines; our records policy; our records policy; our worked example of the quarterly workload; GOV.UK, Penalties for Making Tax Digital for Income Tax; our three-letter sequence; GOV.UK, Self Assessment tax returns: penalties; each step names its source, and the linked guide shows the working.
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