Connect to HMRC for MTD for Income Tax

This article provides a simple guide on how to register your business for Making Tax Digital (MTD) for Income Tax and connect your FreeAgent account with HMRC.

From 6th April 2026, MTD for Income Tax will become mandatory in phases based on your total annual income from self-employment and/or property, beginning with those whose total income from their business and/or property is above £50,000 per year - you can find out more on our MTD for Income Tax page.

HMRC requires anyone needing to comply with MTD for Income Tax to sign up with HMRC, keep digital records and send four quarterly updates about their business and/or property income and expenses to HMRC. You can enable quarterly updates to be sent to HMRC automatically. They will also have to submit an end-of-year update and a final declaration after the end of the tax year. Read more about first year of MTD for Income Tax submissions.

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.

1. Sign up for MTD for Income Tax with HMRC

First visit HMRC’s MTD for Income Tax sign-up page to sign your income stream up, whether that's a business you run as a sole trader, or property rental income.

If you have more than one MTD-qualifying income stream, you’ll need to sign up each one for MTD for Income Tax. You’ll also need separate FreeAgent accounts for each trade you have and another separate account if you’re a landlord. Read more about how to use FreeAgent for MTD for Income Tax if you’re a sole trader with multiple businesses or rental income.

If you need to sign up multiple sole trader businesses for MTD for Income Tax, we'd recommend ensuring that each business has a different and recognisable trading name so you can tell them apart when connecting FreeAgent to HMRC. You can update your business trading names with HMRC if needed.

When you sign up through HMRC’s web portal, they’ll ask you some questions and carry out some checks to ensure you can sign up, and confirm this with you. Once you receive confirmation, you’ll be able to connect your FreeAgent account(s) with HMRC for MTD for Income Tax.

2. Connect FreeAgent to HMRC

Once you’ve received confirmation from HMRC that you’ve signed up to MTD for Income Tax, select 'Connections & Add-ons' from the drop-down menu below your business name.

Select ‘Get started’ in the ‘HMRC connections’ section. Please note that only users with full (level 8) access will be able to see the ‘HMRC connections’ section. If you’re an accountant or bookkeeper with a FreeAgent Practice Dashboard, you’ll need to set up your dashboard for MTD for Income Tax and sign up your clients that way.

Select ‘Connect FreeAgent to HMRC for Income Tax’. Please note that the screen you’ll see will depend on whether or not you’re VAT-registered and have set up the MTD for VAT connection.

If you haven't entered your National Insurance (NI) number in your user profile, enter your NI number in the field provided and select which tax year you want to make MTD for Income Tax submissions for.

Select ‘Connect FreeAgent to HMRC for Income Tax’.

You'll be redirected to the HMRC website to complete the connection process. Select ‘Continue’ and fill in your Government Gateway credentials.

When the connection is completed successfully, you’ll see the following screen. Please see below for steps to take if the connection was unsuccessful.

Please note that FreeAgent can only show a tax year once it has started. If you click the green button or go to 'Taxes' and then 'Income Tax', but don't see your MTD for Income Tax returns, it may be because the tax year in question has not started yet. For example, if you sign up to MTD for Income Tax for the 2026/27 tax year, you won't see an MTD for Income Tax return in FreeAgent until 6th April 26.

If you’ve registered more than one income stream for MTD for Income Tax, you’ll be asked which one you want to link to your FreeAgent account when connecting FreeAgent to HMRC. Please note that you won’t be able to change this after you have made a submission to HMRC, so please ensure you select the correct income stream for each FreeAgent account. If you're not able to identify which sole trader business each income stream relates to, you can update your business trading names with HMRC to something different and recognisable, disconnect FreeAgent from HMRC and then set up the connection again.

You’ll now be able to send quarterly updates to HMRC via MTD for Income Tax using FreeAgent. You can enable quarterly updates to be sent to HMRC automatically. Find out how to view or update your MTD for Income Tax settings.

HMRC requires you to update your MTD connection every 18 months. FreeAgent will display an ‘Expiring soon’ warning in the 'HMRC Connection' box on the right-hand side of your MTD for Income Tax returns 10 days before the connection is due to expire.’ Select ‘Update connection’ to renew the connection.

To learn more about the government's Making Tax Digital initiative, check out our MTD guides and resources and HMRC’s guides.

Problems connecting to HMRC

If there is a problem during the connection process, you’ll see the following error message.

This error message could be due to a number of reasons:

1. You haven’t completed the sign-up for MTD for Income Tax. Please try logging in to your HMRC business tax account and check that you can access MTD for Income Tax services. If you can't, you'll need to complete the sign-up for MTD for Income Tax.
    
2. You are an accountant or bookkeeper trying to connect an Agent Services Account. If you are an accountant or bookkeeper with a FreeAgent Practice Dashboard, you’ll need to set up your dashboard for MTD for Income Tax and sign up your clients that way.
    
3. You’ve entered your National Insurance number incorrectly. Please double-check that the National Insurance number in your FreeAgent account matches the National Insurance number in your HMRC business tax account.
    
4. If the National Insurance numbers in your FreeAgent account and HMRC business tax account do match, please try again manually entering the same credentials you used to sign in to your business tax account. Be sure your browser does not auto-complete these for you. If it does, you’ll need to manually overtype them.
    
5. Ensure you are not logged into a different HMRC account on the web browser you are using. This can result in HMRC trying to connect to the account you are currently logged in as.

Government Gateway or Companies House: which filing credentials do I need to use in FreeAgent?

In this video, Nicolas from the FreeAgent support team explains what HMRC Government Gateway and Companies House filing credentials are, and when you’ll need them in FreeAgent.