I’m a non VAT registered sole trader, When it comes to MTD how will I link my QB account to HMRC for quarterly reports and will I get prompts when they are due ?

Hi there, acecandyshop. Even if you’re not VAT registered, QuickBooks Sole Trader is built to connect with HMRC for the new Making Tax Digital (MTD) for Income Tax updates.

When you’re in QuickBooks, head over to the Taxes menu, select Income Tax, and click Authorise to connect your account to HMRC. Follow the on-screen steps, which will take you to the GOV.UK site to sign in with your Government Gateway ID and grant permission.

Once you're back in QuickBooks, you’ll see an MTD Enabled badge. QuickBooks will then nudge you via your main dashboard and email. You'll also see a Tax Tasks widget that counts down the days until your quarterly updates are due.

Starting 6 April 2026, if your total income as a sole trader or landlord exceeds £50,000, the rules for filing taxes are changing. Under the new MTD for Income Tax requirements, you will move away from a single annual Self Assessment to a system of digital record-keeping and shorter quarterly updates.

For more guidance and additional information, you can click on this article: Set up MTD for Income Tax in QuickBooks Online.

If you have additional questions, feel free to comment below.

will it allow entry of pension contributions and other income such as savings interest, and will that alos account for the savings allowance?

Hi there, Steve. Yes, QuickBooks Sole Trader is designed to categorize business transactions, but it also allows you to track Personal or Non-Business items that impact your overall tax liability.

Correctly categorizing these transactions ensures QuickBooks factors them into your tax calculations so you don't overpay. When a pension payment appears in your bank feed, categorize it as a Personal Expense and tag it as a Pension Contribution to trigger the appropriate tax relief. For savings interest, categorize deposits as Other Income and mark them as Personal to keep them separate from business turnover. This builds a comprehensive tax profile where your tax estimate automatically reflects pension relief and savings allowance thresholds.

By categorizing these items correctly, you move beyond just tracking business profit and start building a comprehensive tax profile. Once these are logged, your tax estimate will automatically reflect the relief from your pension and the thresholds of your savings allowance, allowing you to look at what you'll owe at year-end.

You can also work with an accountant to ensure everything stays accurate within the program.

Please don't hesitate to click the Reply button if you have other questions about QuickBooks.