Set up Making Tax Digital for Income Tax in QuickBooks

Learn how to connect your account to stay compliant with the 2026 mandate. If you are a sole trader or landlord with qualifying income over £50,000, you can now link QuickBooks directly to HMRC.

To start filing, you must first perform a "digital handshake." This safely authorises QuickBooks to share your records with HMRC and automatically pulls your tax deadlines directly into your QuickBooks Income Tax dashboard.

Before you begin

1. Register for Income Tax with HMRC: If you have never filed a tax return before, you need to register with HMRC first. This gives you a Unique Taxpayer Reference (UTR) and Government Gateway credentials. You use your Government Gateway ID to log into HMRC services — you'll need both to complete the steps below. Register on the HMRC website.
2. Sign up for MTD for Income Tax: Once you have your Government Gateway ID, you need to opt in to MTD for Income Tax separately. Go to the HMRC sign-up page, log in with your Government Gateway credentials, and follow the steps. Simply having a Government Gateway ID is not enough — HMRC needs to recognise you as an MTD-registered taxpayer before you can connect QuickBooks.
3. Verify your business type: Make sure your QuickBooks settings are set to Sole Trader or Landlord under Account and Settings > Advanced.

Step 1: Open the Income Tax app

1. Sign in to QuickBooks Online.
2. Go to All apps from the left-hand menu and select Income Tax.
3. If this is your first time, you will see a welcome screen. Select View Income Tax Estimate or Join MTD for Income Tax.

Step 2: Authorise the connection

This is the "digital handshake" that allows the two systems to talk to each other.

1. Select Continue to HMRC. You will be redirected to the HMRC website.
2. Enter your Government Gateway user ID and password.
3. HMRC will show a list of permissions (e.g., "View your tax records" and "Submit your updates"). Select Grant Authority.
4. Once successful, you will be redirected back to QuickBooks where you will be asked to enter your National Insurance number.

Step 3: Select your income source

Choose the specific business or property income you want to link. Please note that each QuickBooks account can only be connected to one primary income source for MTD reporting.

1. Select your income source: Select the business type you wish to report. This will be either self-employment, UK property or Foreign property. 
2. Review your accounting period  date: QuickBooks will highlight the accounting period type you selected upon registration (e.g., 6 April 2026).
3. Check your accounting method: Confirm if you use Cash Basis or Accruals accounting. This must match the method you have previously used with HMRC.

Step 4: Verify your obligations

Once connected, your Overview page will update with your specific "Obligations."

1. Review the dates for your four quarterly updates.
2. Check that your Final Declaration deadline (31 January) is visible.

Note: If your obligations don't appear immediately, wait 24 hours for HMRC's systems to sync with QuickBooks.

Things to know

• 18-month re-authorisation: For security, HMRC requires you to refresh this "handshake" every 18 months. QuickBooks will notify you when it’s time to do this.
• One connection only: You only need to perform this setup once in each of your QuickBooks accounts. If you have multiple trades (e.g., a shop and a rental property), you will need to complete this  flow for each of your QuickBooks accounts.
• Agent access: If your accountant is filing for you, they will perform their own setup via their Agent Services Account (ASA), but you may still need to "grant authority" via an email link they send you.

More help

• Resource Hub: Visit our Making Tax Digital for Income Tax Resource Hub for step-by-step setup guides, FAQs, and the latest HMRC timeline updates.
• Official HMRC guidance: Making Tax Digital for Income Tax
• QuickBooks Community: Making Tax Digital (MTD) Drop-In Q&A Session
• Help article: Making Tax Digital: Comparing Income Tax vs VAT