Switching to MTD ITSA software

If you are currently using spreadsheets, a non-compliant tool, or software that is not on the GOV.UK recognised list, you need to switch before your MTD ITSA obligation begins. Here is how to do it smoothly.

Step 1: Confirm your obligation start date

Check which phase applies to you based on your qualifying income (self-employment plus property income):

• Phase 1: Over £50,000 — obligation starts April 2026
• Phase 2: Over £30,000 — obligation starts April 2027
• Phase 3: Over £20,000 — obligation starts April 2028

If you are unsure, HMRC’s MTD ITSA guidance explains how to calculate your qualifying income.

Step 2: Choose your software

Select software from the GOV.UK software finder. This site’s comparisons and reviews are designed to help you choose. Key decision factors:

• Budget: Free options (QuickFile, Zoho Books free plan) vs paid options
• Business type: CIS work (Sage), landlord income (Sage, QuickFile), sole trader (FreeAgent, Zoho Books, Untied)
• Current bank: NatWest/RBS users get FreeAgent free
• Accountant: What software does your accountant use or support?

Step 3: Export your current records

Before switching, export your existing income and expense records:

• From spreadsheets: save as CSV
• From other software: use the built-in export function (usually under Settings or Reports)
• From paper records: you will need to digitise these

You do not need to import historical records into your new software, but keep them accessible for reference and in case of an HMRC enquiry.

Step 4: Set up your new software

Most MTD ITSA tools have an onboarding wizard that walks you through:

1. Creating an account and entering basic business information
2. Connecting your bank account (via open banking or manual import)
3. Setting up income and expense categories
4. Connecting your Government Gateway account for MTD ITSA

Allocate 1–2 hours for initial setup. Do this well before your first quarterly deadline.

Step 5: Sign up for MTD ITSA

Switching to compliant software is not enough — you also need to formally sign up for MTD ITSA via your Government Gateway account. You can do this directly at GOV.UK, or your accountant can do it on your behalf.

HMRC recommends signing up at least one month before your first quarterly submission deadline.

Step 6: Run your first quarterly submission

Your first quarterly submission is often the most time-consuming — you are setting up bank feeds, categorising historical transactions within the current period, and learning the workflow. Subsequent submissions are typically much faster.

Most software includes test mode or a dry-run submission that lets you check your figures before submitting to HMRC.

Common mistakes to avoid

Do not sign up too early. If you sign up for MTD ITSA before your obligation date, HMRC will expect quarterly submissions from your sign-up date. This means missing submissions before your legal obligation began can generate penalty points.

Do not leave switching until the last minute. Setting up new software, connecting bank feeds, and completing the first categorisation pass takes more time than expected. Allow at least 4–6 weeks before your first deadline.

Do not assume your current software is compliant. Only software listed on the GOV.UK finder is HMRC-recognised. A tool may advertise MTD ITSA features without being on the official list — always verify at GOV.UK.

Ask your accountant first. If you use an accountant, tell them you are switching before you do. They may have a preferred platform, or they may want to set things up themselves.