Making Tax Digital for ITSA - Join the beta
Learn more about our MTD for ITSA beta and find out if your clients can be a part of the programme.
Watch the welcome video
We’re really excited to be kicking off our MTD for ITSA beta and would love for you and your chosen clients to be a part of the programme. On this page, you’ll find everything you need to know about registering to be part of the beta.
To help you get started, we have a video from our product team explaining what's required to take part in the MTD for ITSA beta, as well as resources to share with your clients about the programme.
HMRC eligibility criteria
HMRC have issued the following criteria for joining the pilot. These will change over time, but for now your clients must be:
- UK resident;
- Sole traders with qualifying income from one business, or landlords that rent out UK or foreign property that was included on the last filed return (however note landlords are not currently within Xero criteria, see below);
- Keeping digital records;
- An accounting period that runs exactly 6 April to 5 April. 31 March year ends are not currently accepted.
- Registered for Self Assessment with returns and payments that are up to date (must have submitted at least one return previously);
- In addition to self-employment income or income from property, HMRC can now support customers joining the pilot who have the following income: Gift aid, PAYE, UK interest (including BBSI), Dividends, and Employment. Customers specifically with CIS income, capital gains, deeds of assignment or if customers want to select to code out are advised not to sign up the the pilot.
- Not have a payment arrangement.
- Not have a 3rd party capacitor.
- Have an up to date address with HMRC.
- Not be bankrupt or insolvent.
- Not be one of the following customer groups: ministers of religion, lloyds underwriters, non-resident, foster carer.
- Not be a partner in a partnership.
Qualifying income is total income in a tax year from self-employment and property, assessed before expenses are deducted. HMRC will use the last Self Assessment tax return filed as a basis to assess income sources.
Xero eligibility criteria
In addition to the criteria outlined by HMRC, Xero have additional qualifying criteria that beta customers must meet to be eligible to join the Xero MTD for ITSA beta from April 2022:
✔ Only have income from a single sole trade business (we will be supporting landlords in future, but not in April 2022);
✔ Use Xero to record business income and expenses from 6 April 2022;
✔ Sign up for MTD for ITSA for the tax year 2022/23.
To help you talk to your chosen clients about the MTD for ITSA beta, and hopefully gain their permission to register, we’ve created these handy resources:
MTD for ITSA beta email template for clients
A downloadable email template with information about joining the MTD for ITSA beta programme, to send to your clients ahead of signing them up.
MTD for ITSA beta client guide
A client guide to accompany the email template, to send to your clients ahead of signing them up to the MTD for ITSA beta.
If you and your client meet the HMRC and Xero criteria, here are the steps and key commitments required for participating in the beta:
✔ Permission from your clients to enrol them in the HMRC MTD for ITSA Pilot
✔ Once accepted by HMRC you will need to also inform your client
✔ Only use the Xero MTD for ITSA solution, as directed by Xero
✔ Provide product feedback and responses to questions asked by Xero
What happens if my clients are declined?
As the eligibility criteria are strict and fairly extensive, it is common that some clients that our partners register are rejected by HMRC. If this happens we will let you know as soon as possible and encourage you to sign up more clients who may be accepted.