Before You Sign Up for MTD: What Records to Gather First

Why preparation matters before you register

Most guides about Making Tax Digital (MTD) focus on what to do after you've signed up. This one is different. If you're about to register but not sure what you'll need to have ready, this is the guide to read first. Getting organised before you create an account means your first quarterly update goes smoothly - and you're not scrambling to find bank statements from six months ago when the deadline is three days away.

This guide covers what records to gather before you register for MTD, what HMRC will ask for when you connect your software, and how to separate your information into the right categories depending on whether you're a sole trader, a landlord, or both.

Step one: confirm your HMRC credentials are working

Before anything else, make sure you can log in to your HMRC online account. When you connect MTD software to HMRC - a process called OAuth - you'll be redirected to an HMRC login page and asked to authorise the connection. If your Government Gateway username or password is out of date, that's the first thing to sort.

You'll need:

• Your Government Gateway user ID (a 12-digit number sent to you by HMRC)
• Your password
• Access to the email address or phone number linked to your account for two-step verification

If you've lost your user ID, visit HMRC's online services login page and use the recovery options. Don't leave this until the day you register - HMRC identity verification can take a few days in some cases.

You'll also need your Unique Taxpayer Reference (UTR). This is a 10-digit number shown on your previous tax returns, any letter from HMRC, or your Personal Tax Account. It's separate from your National Insurance number.

What HMRC will ask for during sign-up

When you sign up for MTD, HMRC will ask you to confirm a few things about your income. Having these details to hand before you start saves time and prevents half-finished registrations.

Your business or income start date

HMRC needs to know when you started your self-employment or property letting. For sole traders, this is usually the date you started trading. For landlords, it's the date you first received rental income. If you've been filing tax returns for years, you'll know this date - check your earliest return if you're unsure.

Your business name and address

If you trade under a business name (for example, "Jane Smith Copywriting" rather than just "Jane Smith"), have that ready. If you work from home, your home address is fine. If you use a separate business address, use that.

Your accounting period

Most sole traders use a standard 6 April to 5 April tax year. If you use a different accounting period, check your previous tax return or ask your accountant. MTD quarterly updates follow the tax year by default, so quarters run: 6 April to 5 July, 6 July to 5 October, 6 October to 5 January, and 6 January to 5 April.

Records to gather if you're a sole trader

The core of any MTD quarterly update is straightforward: income in, expenses out. But you need to have your records organised into those categories before you file. Here's what to collect.

Income records

Gather every source of income from your self-employment for the current tax year. That means:

• Sales invoices you've issued (paid and unpaid)
• PayPal, Stripe, or other payment processor statements showing income received
• Bank statements showing income deposits - highlight or mark business income clearly
• Cash income records if you take cash payments (a simple spreadsheet or logbook is fine)
• Any platform income, such as earnings from freelance marketplaces or digital product sales

For MTD, you report income on a cash basis by default - meaning you record it when the money actually arrives in your account, not when you raise the invoice. If you're unsure what basis you've been using, check your last tax return or read What to Include in Your MTD Quarterly Update: The Bare Essentials.

Expense records

Expenses reduce your tax bill, so it's worth getting these properly organised before you register. MTD groups expenses into standard categories - things like office costs, travel, marketing, and professional fees. You'll need receipts or records to support what you claim.

Collect:

• Receipts for any business purchases - digital photos or PDFs are fine
• Bank and credit card statements showing business spending
• Records of mileage if you use your own vehicle for work (date, purpose, distance)
• Details of any items used partly for business and partly privately (for example, your phone or home broadband)
• Invoices from suppliers, subcontractors, or freelancers you've paid

If you use your home as your workplace, you may be able to claim a flat rate allowance for working from home costs rather than calculating actual costs. This is worth noting before you register so you can decide which approach to use from day one.

For a full breakdown of what you can claim, see Self-Employed Business Expenses in MTD: What You Can Actually Claim.

Records to gather if you're a landlord

If you receive rental income from one or more UK properties, your MTD records are separate from any self-employment income you have. You'll report property income and expenses as their own category.

Rental income records

For each property you let, gather:

• Tenancy agreements showing agreed rent amounts and tenancy dates
• Bank statements showing rental payments received
• Records of any rent paid in cash (unlikely but possible with some older tenancy arrangements)
• Details of any periods when the property was empty or rent was reduced
• Records of deposit amounts held - deposits are not income and should not be included

Allowable property expenses

Landlords can claim a range of costs against their rental income. Before you register, gather documentation for:

• Letting agent fees and management charges
• Repairs and maintenance costs (not improvements - those are treated differently)
• Buildings and contents insurance premiums
• Gas and electricity bills if you pay these on the tenant's behalf
• Ground rent and service charges for leasehold properties
• Accountancy or professional fees related to the rental business
• Mortgage interest - note that landlords can only claim a tax credit on mortgage interest, not the full amount as a deduction

For more on what landlords can and can't claim, see What Counts as a Landlord Expense in Your Q1 MTD Quarterly Update and Landlord Repairs vs Capital Works: What MTD Allows.

If you have multiple properties

You don't file a separate quarterly update for each property. All your UK residential rental income and expenses are combined and reported together as a single property business. But you do need records for each property individually - in case HMRC ever asks you to break down the figures.

If you have both self-employment and rental income

Many people in this situation find it's the admin that catches them out, not the tax itself. Your self-employment income and your property income are reported separately in MTD, which means your records need to be kept separately too - even if everything currently sits in the same bank account or spreadsheet.

Before you register, go through your records and label each income item and each expense as either "self-employment" or "property". If a cost relates to both (rare, but possible), you'll need to decide how to apportion it. Read Mixed Income MTD: Which Expenses Count for Self-Employment vs Property for guidance on this.

How far back do your records need to go?

MTD quarterly updates run from 6 April each year. Your first update covers 6 April to 5 July (Quarter 1). That means when you register, you only need records from 6 April of the current tax year onwards for your first update - not from previous years.

However, if you're registering partway through the year (for example, in June or July), you'll need to have already tracked your income and expenses from 6 April. If you haven't done this, now is the time to reconstruct those records from bank statements and invoices before you open your account.

Previous years' records don't go into MTD quarterly updates - they were handled through your regular tax return. But keep them anyway. HMRC can open a compliance check going back several years. Read How Long to Keep MTD Records After Filing: HMRC Retention Rules for the full picture.

Getting your records into the right format

You don't need to have perfectly formatted spreadsheets before you register. But the closer your records are to a usable format, the easier your first quarterly update will be.

A basic spreadsheet with these columns works well as a starting point:

• Date
• Description (what was it?)
• Amount (in pounds)
• Category (income, or which expense type)
• Receipt held? (yes/no)

If you prefer to import data rather than type it in manually, AffordableMTD supports CSV import with AI-assisted categorisation. You can export your bank transactions as a CSV file from most online banking apps and import them directly. Read Import Your Expenses Fast: CSV Upload and AI Categorisation Guide to see how that works.

A practical pre-registration checklist

Before you open your MTD account, run through this list:

1. Government Gateway user ID and password - confirmed working
2. HMRC two-step verification set up and accessible
3. Unique Taxpayer Reference (UTR) to hand
4. Business start date confirmed
5. Business name and address ready
6. Income records gathered from 6 April onwards - invoices, bank statements, platform summaries
7. Expense records gathered from 6 April onwards - receipts, statements, mileage logs
8. Mixed-use expenses identified and proportions worked out
9. Property income and expenses separated from self-employment (if applicable)
10. Each property's tenancy details, rent received, and allowable costs documented

If you're missing items from this list, focus on those first. Registering before you have your records ready just means your first deadline will feel more stressful than it needs to be.

What you don't need to worry about yet

A few things people often worry about that you don't need to sort before registering:

• End-of-year adjustments and allowances - these go into your final declaration at the end of the tax year, not quarterly updates
• Capital allowances - similarly handled at year end
• Student loan repayments, pension contributions, Gift Aid - these are final declaration items
• Previous years' underpaid tax - that's separate from MTD filing

Your quarterly update is just a summary of income and expenses for that three-month period. Keep the scope of what you're preparing for in mind - it's more manageable than most people expect.

Ready to register

Getting organised before you sign up is the part most guides skip over - but it makes a real difference to how confident you feel when you actually file. Gather your income records, sort your expenses into categories, make sure your HMRC login works, and know your UTR. That's genuinely most of what you need. Once those things are in place, opening your MTD account and submitting your first quarterly update is a much calmer experience.