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MTD for IT: Accountant FAQs in QuickBooks

by Intuit• Updated 2 weeks ago

Making Tax Digital for Income Tax (MTD for IT) represents a significant shift in how you manage your sole trader and landlord clients. With the move to quarterly reporting and digital record-keeping, QuickBooks Online Accountant is designed to help you streamline these new workflows and maintain your role as a trusted advisor.

This guide answers the most frequent questions about managing MTD for IT clients within QuickBooks.


Q. How do I gain approval for client submissions?

A. HMRC requires that taxpayers remain responsible for the accuracy of their digital records. Before you submit a quarterly update or Final Declaration on a client's behalf, you must obtain their approval.

  • The workflow: QuickBooks allows you to generate a PDF summary of the data intended for HMRC. You can share this with your client via email or a secure portal for their review and digital signature. You can also send the quarterly submission directly to your client to review from QuickBooks.
  • Record of approval: We recommend keeping a copy of this approval on file, as the final submission to HMRC is a legal declaration that the information is correct and complete.

Q. What is the Agent Services Account (ASA)?

A. To manage MTD for IT (and MTD for VAT) for your clients, you must use a HMRC Agent Services Account (ASA). This is different from your standard Government Gateway account.

  1. You only need one ASA for your entire practice.
  2. You must link your existing client authorisations to this new account.
  3. Once linked, you can use your ASA credentials to "handshake" with QuickBooks, allowing you to file on behalf of your clients.

Q. How does "3-line accounting" work in QuickBooks?

A. HMRC allows simplified "3-line accounting" for eligible smaller businesses. This means your clients only need to report:

  1. Total Income
  2. Total Expenses
  3. Net Profit or Loss

QuickBooks automatically detects if a client meets the eligibility criteria and provides the option to use a simplified view in the Tax Centre, significantly reducing the time spent on categorisation for smaller ledgers.


Q. My clients currently use QuickBooks Self-Employed or Sole Trader. What do I need to do?

A. If you have clients currently using QuickBooks Self-Employed or QuickBooks Sole Trader versions, they will need to move to our newer, MTD-compatible platforms to meet HMRC's "digital link" requirements from April 2026.


Troubleshooting: "Client or Agent not authorised" error

This is the most common error during the MTD for IT setup. It usually happens if:

  • You are using your old HMRC credentials instead of your ASA credentials.
  • The client has not yet accepted your "digital handshake" request in their own Government Gateway account.
  • The client’s MTD IT registration with HMRC is still being processed.

Things to note

  • 18-month re-authorisation: For security, HMRC requires you to re-authorise the link between QuickBooks and your ASA every 18 months.
  • Combined income sources: QuickBooks tracks all of a client's mandated income sources (e.g., two separate trades and one rental property) in a single dashboard view, even though HMRC requires separate updates for each.
  • National Insurance: Class 4 NI is calculated automatically within the QuickBooks Tax Estimate during the Final Declaration process.

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