The MTD Income Tax step most people miss (and why it matters before Monday)

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MTD for Income Tax goes live Monday. Here is the one thing most guides miss.

Every article about Making Tax Digital explains what it is and when it starts. Fewer explain the practical gotcha that will catch people out in the first quarter.

The gotcha: authorisation and submission are different steps.

Setting up your accounting software is not enough. You must separately authorise that software with HMRC via Government Gateway before it can submit on your behalf.

This authorisation step is inside the software — it will prompt you to "connect to HMRC" or "authorise HMRC access." You log in with your Government Gateway credentials. HMRC sends a confirmation.

Without this step, your software can record your income and expenses all it likes. It cannot submit anything to HMRC.

Why this matters right now

If you are setting up this week, do not stop at "software is installed and connected to my bank." That is step 2 of 3.

Step 3 — the HMRC authorisation — is the one that makes the whole thing work.

The other timing issue: VAT vs Income Tax authorisation

If you are already VAT-registered and using MTD-compatible software for VAT, you may think you are done. You are not.

MTD for VAT and MTD for Income Tax are separate authorisations. Even if your software is already HMRC-authorised for VAT, you need to re-authorise specifically for Income Tax.

Most software will guide you through this. Look for a setting called "MTD for Income Tax" or "ITSA" specifically — not just "Connect to HMRC."