Agent Update: Making Tax Digital for Income Tax

HMRC have published a special Making Tax Digital (MTD) edition of their Agent Update. We have summarised the key content, including helpful reminders, videos and resources that you may find useful.

agent update

If your client's total income from self-employment and property was over £50,000 on their 2024-25 tax return, they need to use Making Tax Digital (MTD) for Income Tax in the 2026-27 tax year.

  • The first quarterly update deadline is 7 August 2026.

Your client's first quarterly update

You can use your software to generate the update.

  • It does this by creating totals for each income and expense category, based on the digital record created in the first quarter of the tax year. 

If you are happy with the figures you see, you can send the update to HMRC immediately.

  • If you want to make changes, or if you have not finished creating the digital records yet, you have until 7 August to send them. 

A quarterly update is not a tax return, so you do not need to make any accounting or tax adjustments before sending it. 

  • Once you have sent the quarterly update, you will be able to see your client's estimated tax bill, which will build throughout the rest of the year.

Your software will default to an accounting period of 6 April to 5 April.

  • If your client's accounting period covers 1 April to 31 March, select calendar update periods in your software before sending your first update.
    • You will not be able to change it for the rest of the tax year.
  • You will need to do this for each of your clients' self-employment and property businesses.

What to do before you can send your update

Remember that you will not be able to send your clients' quarterly update until you have:

  • Added client authorisations to your Agent Services Account (ASA).
  • Signed up your clients for MTD.
  • Linked your chosen software to HMRC. 

Add client authorisations to your ASA

You can use your existing client authorisations for MTD for Income Tax, but you need to add them to your ASA first. 

  • You will need to repeat the process for each Self Assessment agent code if you have more than one.

MTD for Income Tax has also enabled taxpayers to appoint more than one agent, giving them greater control over how they manage their tax affairs. 

You must have an ASA to be able to use MTD for Income Tax.

  • If you do not already have one, you need to create one.
  • An ASA is not the same as an HMRC online services for agents account.

YouTube video: How to add client authorisations to your Agent Services Account

Sign your clients up

If your clients need to use MTD for Income Tax this tax year, it is not too late to sign them up now.

  • If you are not sure whether a client needs to use MTD, use HMRC's online tool to find out if and when they need to use it.
  • You will need to sign up each client individually.

Signing your clients up allows you to control how they join MTD for Income Tax.

  • You can check that their income sources are up to date, make any changes needed to ensure your clients are set up with the correct MTD obligations from the start.

On average, sign-up takes less than four minutes per client. 

YouTube video: How do I sign up my client to Making Tax Digital for Income Tax?

Link your chosen software to HMRC

To be able to send a quarterly update, you need to link your chosen software to HMRC.

To do this:

  1. Select the option in your software to connect to HMRC.
  2. Enter your firm's ASA user ID and password.
  3. Pass the identity check by entering personal information and details from identity documents.
  4. Permit your software to connect to HMRC.

If you are still choosing your software, use HMRC's software finder tool to help:

  • Find compatible software that meets your needs.
  • Search for your existing software to check if it works with MTD for Income Tax. 

YouTube video: How do I choose software for Making Tax Digital for Income Tax?

See Making Tax Digital for further guidance and resources.

What agents are saying

HMRC say that they have been asking agents, bookkeepers and accountants, at recent MTD events about their experience using Making Tax Digital for Income Tax so far. HMRC's Agent Update includes several quotes in favour of MTD. 

External links

Agent update: Making Tax Digital for Income Tax

HMRC's online tool: Find out if and when you need to use Making Tax Digital for Income Tax