1. Introduction

  • MTD for Income Tax means you must use HMRC recognised software to keep digital business records and submit your personal tax information, instead of completing a tax return.
  • Use Clear Books free subscription to keep digital records of income and expenses
  • Submit from Clear Books to HMRC once a quarter and finalise your tax position when the tax year ends


2. Recording Income

  • Invoices: Create and send invoices to customers. Clear Books records your income from invoices created.
  • Manual Entry: Record income using the "Record income" button. HMRC has allowed retailers to enter daily income totals.
  • Bank Transactions: Set up your bank feed and identify new revenue received into your bank account. Clear Books will learn and automatically record similar transactions as income in the future.
  • Mix and Match: Use any combination of these methods. Clear Books avoids double counting by allocating money received to any invoices or income recorded already, marking them as paid.


3. Recording Expenses

  • Manual Entry: Use the "Record expenses" button to manually create records of business expenditure..
  • Auto Bills: Upload or, email receipts and purchase invoices, or use the Clear Books app to take photos of receipts. Clear Books extracts the data ready for you to review and save as a digital record.
  • Bank Transactions: Set up your bank feed and identify new expenses paid from your bank account. Clear Books will learn and automatically record similar transactions as expenses in the future.
  • Mix and Match: Use any combination of these methods. Clear Books avoids double counting by allocating money paid to any bills recorded already, marking them as paid.


4. Reports

  • Profit & Loss: Track your business performance.
  • Cash Flow: See performance based on payment dates.


5. MTD for Income Tax Submissions

  • Setup: Enter your NI number, authorise Clear Books with HMRC, and map your income source.
  • Quarterly Submissions: Clear Books will notify you when they are due. Review and submit with one click.
  • No corrections needed: Submissions don’t need to be perfect, each update will include any changes to previous quarters, and adjustments can be made at the end of the tax year to make sure you pay the right amount of tax.