Complete the Annual summary page for MTD for Income Tax
This article provides a simple guide on how to complete the Annual summary page to send to HMRC as part of a quarterly update or end-of-year update for Making Tax Digital (MTD) for Income Tax using FreeAgent.
You'll need to complete the Annual summary page to send details of any adjustments, allowances, non-financial information about your income stream and Class 4 National Insurance contributions to HMRC. Any information entered will be included in your next submission and used by HMRC to calculate your tax estimate.
You can enter the information at the end of the tax year to include it in your end-of-year update or enter it earlier to automatically include it in your quarterly update information. This information must be submitted to HMRC before making your final declaration.
Please note:
- FreeAgent’s MTD for Income Tax functionality is available for sole traders and unincorporated landlords. Read our fast-track guides for sole traders and landlords for MTD for Income Tax.
- If you have more than one income stream, for instance if you're self-employed and also a landlord, you'll need a sole trader and an unincorporated landlord account in FreeAgent. You can find out what counts as multiple income streams, as well as tips for managing more than one income stream, in our how to efficiently manage multiple income streams guide.
- You’ll need full (level 8) access to complete the Annual summary page.
- If you use FreeAgent with your accountant, they may submit your quarterly updates, end-of-year updates and/or final declarations on your behalf and restrict your ability to access and submit these. Please speak to your accountant if you have any questions or want to be able to access these but can't see them. FreeAgent is unable to change these permissions for you.
-
We are not authorised by HMRC to provide accounting or tax advice. Therefore, FreeAgent’s support team cannot help you with adjustments and allowances. If you’re unsure which adjustments and allowances you need to make, please speak to your accountant or to HMRC.
- If you have a FreeAgent Practice Dashboard, you’ll need to switch to your client’s account to follow the steps below once you’ve set up your practice for MTD for Income Tax and signed up your clients.
The Annual summary page
Navigate to the ‘Taxes’ tab at the top of the screen and select ‘Income Tax’ from the drop-down menu.
Select the relevant tax year from the list.
Select the ‘Annual summary’ tab.
From here, you can enter adjustments, allowances and non-financial information that you want to send to HMRC as part of a quarterly update or end-of-year update.
Adjustments
In the ‘Adjustments’ section, you can add the following adjustments if you have a sole trader account type:
- ‘Accounting Adjustment’
- ‘Averaging Adjustment’
- ‘Balancing Charge BPRA’
- ‘Balancing Charge Other’
- ‘Basis Adjustment’
- ‘Goods and Services Own Use’
- ‘Non Taxable Profits’
- ‘Outstanding Business Income’
- ‘Overlap Relief Used’.
Read more on what these adjustments are used for and their corresponding boxes on the Self Assessment tax return.
If you have an unincorporated landlord account type, you can add the following adjustments:
- ‘Balancing Charge BPRA’
- ‘Balancing Charge Other’
- ‘Private Use Adjustment’
Read more on what these adjustments are used for and their corresponding boxes on the Self Assessment tax return.
You can also edit and delete any existing adjustments in this section.
Allowances
In the ‘Allowances’ section, you can add the following allowances if you have a sole trader account type:
- ‘Allowance on Sales’
- ‘Annual Investment Allowance’
- ‘Business Premises Renovation Allowance’
- ‘Capital Allowance Main Pool’
- ‘Capital Allowance Single Asset Pool’
- ‘Capital Allowance Special Rate Pool’
- ‘Electric Charge Point Allowance’
- ‘Enhanced Capital Allowance’
- ‘Enhanced Structured Building Allowance’
- ‘Structured Building Allowance’
- ‘Trading Income Allowance’
- ‘Zero Emissions Car Allowance’
- ‘Zero Emissions Goods Vehicle Allowance’
Read more on what these allowances are used for and their corresponding boxes on the Self Assessment tax return.
If you have an unincorporated landlord account type, you can add the following allowances:
- ‘Annual Investment Allowance’
- ‘Business Premises Renovation Allowance’
- ‘Cost of Replacing Domestic Items’
- ‘Enhanced Structured Building Allowance’
- ‘Other Capital Allowance’
- ‘Property Income Allowance’
- ‘Structured Building Allowance’
- ‘Zero Emissions Car Allowance’
- ‘Zero Emissions Goods Vehicle Allowance’
Read more on what these adjustments are used for and their corresponding boxes on the Self Assessment tax return.
You can also edit and delete any existing allowances in this section.
Non-financial Information
In the ‘Non-financial Information’ section, you can enter any non-financial information about your income stream details and any Class 4 National Insurance contributions to HMRC.
You can declare if your business details have changed within the last 12 months, and if you are exempt from class 4 NICs or not.
Class 4 National Insurance contributions
Most sole traders have to pay Class 4 National Insurance contributions (NICs), but there are a few exceptions. For example, if you are under 16, over state pension age or not a resident in the UK for tax purposes at the start of the tax year in question, you may be exempt from paying Class 4 NICs. If this applies to you, select the relevant option from the drop-down menu. If you’re not exempt from paying Class 4 NICs, select ‘Not Exempt’.
If you’re unsure, please speak to your accountant or to HMRC.