Update your MTD for Income Tax settings
This article provides guidance on updating your Making Tax Digital (MTD) for Income Tax settings in FreeAgent.
Once you’ve signed up to MTD for Income Tax and set up the connection in FreeAgent, an ‘MTD for Income Tax business’ and ‘MTD for Income Tax start year’ will be added to your user profile in FreeAgent. Please see below for details on how to check these and update the settings if you need to.
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.
- 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. FreeAgent is unable to change these permissions for you.
- 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 and clients for MTD for Income Tax.
Navigate to your user profile
Select ‘Settings’ from the drop-down menu in the top-right corner of the screen and select ‘Users’.
Select your name from the list.
Updating your MTD for Income Tax business
When you sign up for MTD for Income Tax with HMRC, you’ll be issued a 15-digit ID number from HMRC.
When you set up the MTD for Income Tax connection in FreeAgent, FreeAgent will automatically populate the ID number that’s related to your National Insurance number in HMRC’s records in the ‘MTD Income Tax business’ field. 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. You can change the income stream from the drop-down menu, provided you have not made any submissions to HMRC yet.
If you're not able to identify which sole trader business each business ID relates to, you can update your business trading names with HMRC to something you can easily recognise, disconnect FreeAgent from HMRC and then set up the connection again.
Once you’ve made changes, select ‘Save Changes’ at the bottom of the screen to complete the process.
Updating your MTD for Income Tax start year
When you set up the MTD for Income Tax connection in FreeAgent, the ‘MTD Income Tax start year’ will default to the beginning of the current tax year.
FreeAgent uses this date to determine when to start aggregating information to send to HMRC as part of your quarterly updates. Any transactions dated before this date will not be included in your quarterly submissions.
If your accounting year-end date is dated on 5th April or between 31st March and 4th April, you can set a later FreeAgent start date than 6th April but you must ensure that your opening balances are entered to include the total income and expenditure dated from the start of the tax year up to your FreeAgent start date. This will ensure that the year-to-date quarterly updates that FreeAgent sends to HMRC are accurate.
Once you’ve made changes, select ‘Save Changes’ at the bottom of the screen to complete the process.