GovTech HMRC Making Tax Digital for Income Tax — Self-Employed Platform

HMRC MTD ITSA API Integration

MTD ITSA (Making Tax Digital for Income Tax Self-Assessment): replaces the annual Self Assessment tax return with quarterly digital updates from April 2026.

HMRC MTD ITSA API

• 1Self-Employment and Property Income Source registration (register each income source — NINO, business type, accounting basis),
• 2Periodic Summary Updates (quarterly — income and expenses for each accounting period),
• 3End of Period Statement (EOPS — annual crystallisation of business income + adjustments),
• 4Final Declaration (replaces SA100 — annual declaration that all income reported).

API authentication

HMRC MTD ITSA uses OAuth 2.0 (agent authorisation or client self-service).

HMRC sandbox testing

mandatory before production access — all 4 submission types tested in HMRC sandbox environment.

Automatic Bookkeeping and Expense Categorisation

MTD ITSA requires categorised income and expenses — the basis for quarterly updates.

Automatic bookkeeping

• 1bank feed integration (Open Banking AISP via TrueLayer — sole trader bank account transactions),
• 2transaction categorisation (ML model — invoice receipts,

HMRC expense categories

• materials, employees, accommodation, financial charges, legal/professional, marketing, office costs, travel), (3) receipt capture (mobile app camera → AWS Textract OCR → supplier, amount, VAT, date extracted → expense categorised), (4) mileage tracking (React Native app GPS — business mileage log for HMRC approved mileage allowance), (5) invoice management (create professional invoice, track payment, allocate to quarterly income).
• HMRC-compliant record keeping: 6-year digital record retention (HMRC requirement for business records).
• Agent Authorisation and Multi-

Client Dashboard

UK accountants act as tax agents for their clients — MTD ITSA agent authorisation required.

Agent services

• 1HMRC Agent Services Account (ASA — accountant registers, receives agent reference number),
• 2client authorisation (client grants agent access via HMRC online — accountant can then submit MTD updates on behalf of client),
• 3multi-client dashboard (accountant sees all clients, submission deadlines, outstanding updates),
• 4bulk submission (accountant reviews and approves all client quarterly updates in one workflow),
• 5delegation control (accountant can delegate to junior staff — permission levels per client).

HMRC Digital Handshake

client must authorise agent via HMRC online portal (anti-fraud control — cannot authorise via third-party software).

MTD ITSA Cashflow and Tax Estimation

Value-add beyond compliance: MTD ITSA creates quarterly visibility of income → real-time tax estimation.

Cashflow features

• 1tax estimate (running income × tax rate → estimated annual tax liability — updated quarterly),
• 2payment on account predictor (HMRC payment on account — 50% of prior year tax liability paid by 31 January, 50% by 31 July — automated prediction),
• 3Class 2/4 NIC calculation (self-employed National Insurance — NIC estimate from profits),
• 4cashflow forecast (income - expenses - estimated tax = quarterly cashflow),
• 5Making Tax Digital calendar (all HMRC submission deadlines + payment dates — push notifications via app).

HMRC Payment Plan

if estimated tax exceeds £5,000 → automatic notification that Time to Pay arrangement may be available.