MTD for Income Tax changes how you record income and expenses and send updates to HMRC.

In Sage Sole Trader, you connect your business to HMRC, confirm your details, and turn on the Income Tax features.

You can then submit quarterly updates and complete your end of period tasks in Sage Sole Trader.

Before you start, check you:

• Meet HMRC’s criteria and sign up for MTD for Income Tax on the HMRC website: gov.uk/government/collections/making-tax-digital-for-income-tax
• Have HMRC’s confirmation email before you connect Sage Sole Trader
• Have your Government Gateway user ID and password
• Have your National Insurance number
• Use the business type Sole Trader, or UK property business

If your business type is wrong, change it before you start setup.

Set up Income Tax

1. In Sage Sole Trader, go to Income Tax. 
2. If you haven’t signed up yet, select Sign up on HMRC.
3. Complete the HMRC sign-up process in your browser.
4. Return to Sage Sole Trader after HMRC confirms your sign-up.
   NOTE:

   HMRC confirms your registration by email.

5. If you’ve already signed up on the HMRC website, select I’m already set up.

Connect Sage Sole Trader to HMRC

6. Select Connect to HMRC.
7. In the HMRC connection wizard, select Continue.
8. Enter your Government Gateway user ID and password, then follow the HMRC steps.
   NOTE:

   This connection will last for 18 months, after which you need to reconnect to HMRC.

9. When you return to Sage Sole Trader, enter your National Insurance number.
10. Select Continue.

Confirm your business details

11. When Sage finds one business, review the details and skip to step 15.
    
    NOTE:

    For multiple businesses, create a separate Sage Sole Trader business for each one.

12. If Sage finds multiple property businesses, select the one you want to use.
    If HMRC returns multiple income sources, select the one to link to your Sole Trader instance.
13. If you’re setting up a property business, answer the question about ownership:
    • Select Yes if you own all properties in the business
    • Select No if you don’t own all properties, then enter your ownership share percentage
14. Select Continue.
15. On the Business overview page, check the details.
16. Select Confirm if the details are correct.

You can now connect your bank or import transactions to report to HMRC each quarter.