MTD Income Tax Submission
Acxite streamlines your Making Tax Digital (MTD) for Income Tax by automatically preparing your quarterly updates from your recorded paperwork. By simply uploading your invoices, bills, and receipts, Acxite’s powerful data extraction engine converts them into digital transactions. From there, you can review your summary, finalise the figures, and submit your update directly to HMRC with ease.
This guide will walk you through configuring Income Tax mappings, generating quarterly IT returns and submitting them to HMRC.
Prerequisites
Before you begin, ensure the following have been completed:
- HMRC Connection: Your Acxite account must be connected to HMRC for MTD. Please refer to the following article: Connect Acxite to HMRC.
- Document Processing: All sales invoices, purchase bills, and receipts for the relevant period have been uploaded and approved in the Purchases and Sales modules. The accuracy of your update depends on this data.
- Business Settings: In your Acxite business configuration (Business Configuration > Business Details), your Tax Status must be set to Registered.
- Two-Factor Authentication (2FA): 2FA must be enabled on your Acxite user profile for security before submitting to HMRC. Please refer to the following article: Set up Two-Factor Authentication.
Understanding the Income Tax Summary Page
The Income Tax Summary page is your central hub for preparing and submitting MTD ITSA updates. It is organised into several tabs to give you a comprehensive view of your data.
- Tax Obligations: This tab automatically imports and displays your quarterly filing obligations from HMRC, showing each period’s start date, end date, and submission status.
- Tax Return: This is the primary summary. It calculates and displays the figures for the HMRC income and expense boxes based on your transactions and mapping rules. This is where you review your final figures before submission.
- Transaction by Tax Box: This report provides a detailed breakdown of every transaction contributing to the total in each specific HMRC box (e.g., all transactions that make up Box 15 – Your Turnover). Use this to verify your totals.
- Summary by Category: This offers a high-level summary of your transactions grouped by your Chart of Accounts categories.
- Transaction by Category: This is the most granular report, listing every individual transaction under its assigned category.
- MTD Income Tax (Mapping Function): This button, located at the top right, is not a report but a crucial configuration tool. It allows you to define how your business’s Chart of Accounts categories are mapped to the official HMRC income tax boxes.
Understanding and Configuring MTD Income Tax Mapping
MTD Income Tax Mapping is the process of assigning your Chart of Accounts categories in Acxite to the correct boxes on your MTD quarterly update. This ensures that every transaction is reported correctly to HMRC.
While Acxite provides a default mapping, you must review and customise it to match your business’s specific accounting setup.
How MTD Income Tax Mapping Works
For each category in your Chart of Accounts, you define how it should be treated for tax purposes.
- Income Categories: You will map each income category (e.g., Sales, Other Revenue) to the relevant HMRC income box, such as Box 15 (Your turnover) or Box 16 (Any other business income).
- Expense Categories: For each expense category, you must define two things:
- HMRC Box Mapping: Map the expense to the appropriate HMRC expense box (e.g., Box 17 – Cost of goods bought, Box 20 – Car, van and travel expenses).
- Tax Treatment: Specify whether the expense is Allowed, Disallowed, or has No Effect. This determines if the expense can be claimed against your income for tax purposes.
Steps to Configure MTD Income Tax Mapping
Step 1 – Navigate to the Income Tax Summary page from the business menu.
Step 2 – Click the MTD Income Tax button located at the top right of the page.
Step 3 – A mapping page will appear, listing all your Income and Expense categories from your Chart of Accounts.
Step 4 – For each Income category, use the dropdown on the right to select the correct HMRC income box (e.g., 15 – Your turnover).
Step 5 – For each Expense category, first select the tax treatment (Allowed, Disallowed, or No Effect), then select the corresponding HMRC expense box.
Step 6 – Once you have mapped all necessary categories, the settings are saved automatically. You can now return to the Income Tax Summary page to see the updated calculations.
Step-by-Step Guide to Submitting Your MTD Income Tax Update
Step 1 – Navigate to the Income Tax Summary page from the business menu.
Step 2 – If you haven’t already, click Connect to HMRC. Enter your National Insurance Number, click Continue, and follow the on-screen prompts to authorise Acxite. You will then be asked to link the relevant HMRC income source (e.g., your self-employment business) to your Acxite business.
Step 3 – On the Tax Obligations tab, click the arrow next to the open period you wish to file. This will take you to the Tax Return tab populated with data for that period.
Step 4 – Carefully review the automatically calculated figures in each box. To investigate any figure, use the Transaction by Tax Box or Transaction by Category tabs for a detailed breakdown.
Step 5 – Once you are confident the figures are accurate, click the Submit to HMRC button at the top right.
Step 6 – A final confirmation pop-up will appear. Review the details, tick the declaration box to confirm the information is true and complete, and click Submit Tax Return to HMRC.
Step 7 – After a successful submission, a success message will appear. From here, you can “Print Tax Return” for your records and use the Lock Period feature to prevent any further changes to transactions within the submitted period. You can also click the tax estimate link at the top of the page to view your tax estimate directly on the GOV.UK website.
Your MTD quarterly update has now been submitted to HMRC.
Important Considerations & Limitations
- The Income Tax summary is calculated only from transactions recorded in the Purchases and Sales modules. Transactions from Bank Statements, Supplier Statements, or Sales Ledger must first be converted into purchase or sales transactions to be included.
Frequently Asked Questions
Q: My income or expense figures look wrong. How do I fix them?
Do not edit the figures on the Tax Return summary directly. The summary is calculated from your source transactions. To fix a figure, navigate to the Purchases or Sales module, find the underlying transaction (e.g., an invoice with an incorrect category or amount), and correct it. Once the source document is corrected and approved, the Income Tax Summary will update automatically.
Q: Why is the ‘Submit to HMRC’ button greyed out?
This can happen if: 1) The period you have selected has already been fulfilled. 2) The end date of the period has not yet passed. 3) Your authorisation with HMRC has expired; in this case, a “Reconnect” button will appear.
Q: I submitted an incorrect update. How do I correct it?
Once an MTD update is submitted to HMRC, it cannot be recalled or amended through Acxite. You will need to make corrections in a subsequent submission. We strongly recommend consulting your accountant for guidance on how to rectify errors.
Q: A category is missing from my tax return summary. Why?
This means the category has not been mapped to an HMRC box. Go to the MTD Income Tax mapping page and ensure the category is assigned to the correct box. Any category with no mapping will be excluded from the calculation.
Related Articles
- Connect Acxite to HMRC
- Set up Two-Factor Authentication
- Lock Accounting Periods
- Managing your Chart of Accounts