4.5 Select your client’s income sources
1. Introduction
MTD for Income Tax is the alternative to the self-assessment tax return, for UK taxpayers. Individuals will be automatically signed up to MTD for Income Tax based on the total gross income from self-employment and property reported on their previous traditional tax return:
When an individual is signed up to MTD for Income Tax, they must use HMRC recognised software, like Clear Books, to keep digital records and submit income and expenses to calculate your tax position.
2. Income sources
HMRC requires that digital records are kept separately, and quarterly updates are submitted for each income source. Each self-employment business will be recorded as an income source at HMRC.
Each Clear Books business can be linked to one HMRC self-employment income source during the setup process.
3. Setup - individuals
If submitting your own quarterly updates as an individual, you will need to link your Clear Books business to your HMRC online account.
Go to Tax > Income Tax > MTD for Income Tax to get started.
3.1 Start the wizard
This explains when individuals will be automatically signed up. Click next to continue
3.2 Enter NI number
Enter your national insurance number.
3.3 Setup HMRC online account
If you have not yet set up an HMRC online account, use the first button to set one up. If you have not yet signed up to MTD for Income Tax, use the second button to run through the sign up process in your HMRC online account.
3.4 Authorise Clear Books
Authorise Clear Books to read and submit your HMRC income tax information. Use the button to log into your HMRC account and complete the process of permitting Clear Books to view and edit your income tax information.
Authorisation complete:
3.5 Select income source
Select which of your HMRC account income sources to link to the current Clear Books business. When selected, you will see the information that HMRC holds for that income source.
When all steps are completed, use the button to view your quarterly submission obligations.
4. Setup - agents
Agents can submit MTD for Income Tax on behalf of their clients.
Within your Clear Books client’s account, go to Settings > Configure System > Toggle features > Tax and bank import tool.
Within the Income Tax section, select the option for agent submissions.
Go to Tax > Income Tax > MTD for Income Tax to onboard the current client to MTD for Income Tax.
4.1 Start the wizard
This explains when individuals will be automatically signed up. Click next to continue
4.2 Enter client’s NI number
Enter the client’s national insurance number.
4.3 Setup HMRC online account
If you have not yet set up an HMRC Agent Services Account (ASA), use the first button to set one up.
Existing client authorisation can be copied to your ASA using the second button.
If your client has not yet signed up to MTD for Income Tax, use the final button to run through the sign up process in your ASA.
4.4 Authorise Clear Books
Authorise Clear Books to read and submit HMRC income tax information for your clients. Use the button to log into your ASA and complete the process of permitting Clear Books to view and edit your clients’ income tax information.
Clear Books authorisation is only required once for your ASA and will apply to all MTD for Income Tax submissions for your clients.4.5 Select your client’s income sources
Select which of your client’s HMRC account income sources to link to the current Clear Books business. When selected, you will see the information that HMRC holds for that income source.
When all steps are completed, use the button to view your client’s quarterly submission obligations.
