Making Tax Digital (MTD) Drop-In Q&A Session

Hi, I usually do the majority of my tax return through Quickbooks but also use an accompanying spreadsheet for things that aren't linked to my business bank account but still need including, I then work out a final total to submit taking into consideration my Quickbooks profit and loss plus the spreadsheet of additional costs/earnings.

How do I manage these anomalies when submitting via Quickbooks?

Thank you. 

Welcome to the community, Denomane. In QuickBooks Online (QBO), all categorized transactions are included in tax calculations, whether they are bank-connected or manually recorded.

To add items from your spreadsheet to QBO, you need to manually record and categorize them correctly. For detailed steps, refer to this article: Categorize Online Bank Transactions in QuickBooks.

You can also import transactions from external sources using a CSV file. Once uploaded, you can organize them and assign the appropriate tax codes, either in bulk for similar transactions or individually as needed. Please see this article for guidance: Manually Upload Transactions into QuickBooks Online.

If you have any further questions or need clarification, feel free to reach out.

I've been using Quickbooks for my sole trader business for some years now, and it works well for that side of record-keeping, especially my payroll and Tax Returns.

My wife and I also derive income from property rental, which is split 50-50, but we do not have a formal partnership. I have previously been able to track this using a spreadsheet of rental income and allowable expenses.

My combined income is around the threshold for 2025-26 (and should be comfortably above for 2026-27). However, my wife's rental income is not expected to cross this threshold.

Do I need one additional seat of Quickbooks for the property "partnership" income, or two? Should I be setting up the additional seat as a sole trader for my MTD declarations, or as a partnership? If the latter, will quarterly MTD declarations be made for both of us, or only those who qualify (ie: at present, me)?

Many thanks.

Hi, MGS96. It’s great that you’re looking ahead to the 2026 MTD changes. Please note that MTD For Income Tax is based on the individual, not the business/partnership entity. QuickBooks Sole Trader requires a separate license for each distinct income source to remain compliant with HMRC’s reporting categories. This means you will need two subscriptions in total, your existing one for your sole trader business and one new seat for your property income. The system uses your National Insurance Number to automatically link these two licenses together for your MTD filings.

Regarding your wife, since her 50% share of the rental income is not expected to cross the £50,000 threshold, she's not currently mandated for MTD. She can continue to track her share via her current spreadsheet method for her annual Self Assessment.

You should set up the new seat as Landlord/Property income, not as a partnership, as partnerships are not currently in scope for the MTD For Income Tax rollout. Consequently, you are the only one required to report quarterly at this stage, your wife can continue with her current method unless her income crosses the mandatory threshold in the future.

Please don't hesitate to leave us a response if you have other questions or concerns.

I've just registered and set up MTD for Income Tax in Quickbooks. On setup I selected to set the accounting period for updates to Calander Year 01 Apr - 31 Mar, however when I go to the main view it's still showing as Standad Tax year 06 Apr - 05 April. Is there something else that I need to do?

Welcome to the Community, Fiodor. The active tax year can’t be changed manually. Although you’ve selected the 1 April – 31 March calendar year  the dashboard defaults to the standard 6 April – 5 April cycle until your new period officially begins or your first update is filed..

If your quarterly dates haven't updated or the Calendar Year setting didn't save, please contact Live Support team for help as they can take a closer look at your account and walk you through the available options.
 

Go to the Help (?) icon. Then scroll down to select the Contact Us button and follow the prompts. You will be able to request a callback or start a live chat with an expert.

If you have any other questions or concerns, please don't hesitate to reach out. We’re always here to help.

Hi, I’m in same situation - can I ask do I just put 50% of rental income and expenses in on the rental seat as my husband doesn’t need to report yet? 

Yes, that's right. Tiggerpud. You'll record your 50% share in your rental seat while your husband continues with his spreadsheet, since he's under the threshold.

However, since joint property income can become a bit tricky regarding how it is split and reported for MTD, it's worth consulting an accountant to ensure everything is set up correctly from the start.

If you have other questions, let us know in the comments. We're always here to help.