MTD ITSA Accounting Software Implementation

For New Accounting Software Users

This service is designed for sole traders and landlords who are not currently using accounting software and need to be set up correctly for Making Tax Digital for Income Tax (MTD ITSA).

t provides a one-off setup and configuration of MTD-compatible accounting software so digital records can be maintained and quarterly submissions to HMRC can be made in line with MTD ITSA requirements.

👉 Book a meeting to confirm suitability and receive a fixed-fee quote

‍ ‍

What does MTD ITSA Accounting Software Do?

MTD ITSA compliant accounting software:

• Hold your digital records as your accounting records

• Summarises your digital records in a format suitable to transmit to HMRC

• Submits quarterly updates, End of Period Statements (EOPS), and Final Declarations

• Maintains the digital links required by HMRC

The aim should be to configure your correctly, so you can make compliant submissions and have business processes that work for your business and your reporting requirements.

👉 Discuss whether accounting software is right for you before committing

‍ ‍

Who This Service Is Suitable For

This service is suitable for Sole traders or Landlords who:

• Want to move from spreadsheets to using accounting software

• Are setting up a new business that will be complex (e.g. VAT registered)

• Are comfortable learning to use software and technology

• Are currently manage their own bookkeeping, or would be happy doing so going forward

• Would like more insight into how their business is performing

• Are preparing for MTD ITSA who want assurance their setup is correct

This service is not suitable for:

• Those already using accounting software

For Sole Trader and Landlords already using accounting software, see:

👉 MTD ITSA Accounting Software Setup – Existing Users ‍

‍ ‍

How MTD ITSA Submissions Work Using Accounting Software

1. You record income and expenses in your accounting software

2. Transactions are categorised using your chart of accounts

3. Your software maintains digital records and audit trails

4. You use the accounting software to submit Quarterly updates directly to HMRC

5. EOPS and Final Declaration are completed within the software

Quarterly updates are reporting updates only and do not generate tax bills.

👉 Talk through how quarterly submissions will work in practice

‍ ‍

MTD ITSA Accounting Software Setup – One-Off Service

This is a one-time setup and review service to ensure your existing accounting software is MTD ITSA ready.

What the Setup Includes

• Advice about general digital record keeping

• Advice on the suitability of accounting software for your circumstances

• Guidance on selecting appropriate MTD-compatible software

• Initial software configuration

• Set up of Income and expense categorisation for MTD ITSA and business processes (chart of accounts)

• Set up Bank feed (where applicable)

• Set up of HMRC integration and authorisation

• Verification of digital links and reporting structure

• Walkthrough of record-keeping and of quarterly submission process

What the Setup Does Not Include

• Ongoing bookkeeping or transaction entry

• Preparation or submission of quarterly updates

• Ongoing compliance monitoring or tax advice

Ongoing services are available separately if required. (Learn more)

👉 Discuss booking an accounting software setup

‍ ‍

Advantages and Limitations of Using Accounting Software for MTD ITSA

Advantages

• Fully digital records for the start

• Can store more information

• Automated digital records

• Direct integration with HMRC (everything is in one place)

• Stronger audit trails than spreadsheets

• Lower long-term compliance risk

• Some software have error detection

Limitations

• More work to record transactions than other methods

• Can be more expensive than Bridging software

• Can be hard and costly if you need to change set later

• Can be hard to trace how the figures are generated

• it can sometimes be hard to identify the course of and solve errors or submission failures

• it is easier to forget the steps to complete the submission.

Accounting software is often the most robust option for MTD ITSA, provided it is set up and used correctly.

👉 Confirm the current setup is fit for purpose

‍ ‍

Important Compliance Considerations

• Digital records must be complete and accurate

• Incorrect categorisation can affect submissions

• HMRC penalties apply for late or incorrect filings

• Setup errors can persist across multiple quarters

Correct configuration from the outset significantly reduces future compliance issues.

👉 Check compliance before the first MTD submission

‍ ‍

Why Use Circular3?

Choosing the right approach for MTD ITSA is as important as the software itself. Circular3 focuses on getting the setup right, not pushing a particular product or platform.

• Solution-agnostic advice

  Recommendations are based on what fits the circumstances, not on preferred software or commercial incentives.

• Extensive accounting software setup experience

  Practical experience configuring accounting software for landlords and sole traders, including chart of accounts, categorisation, and HMRC integration.

• Focus on correct setup, not shortcuts

  Systems are configured to meet MTD ITSA requirements properly, reducing avoidable issues later.

• Clear scope and fixed fees

  One-off setup services are clearly defined, with no implied ongoing commitment.

• Compliance-first approach

  Emphasis on digital records, audit trails, and reducing HMRC risk.

The aim is to provide a setup that works in practice and supports MTD ITSA compliance without unnecessary complexity.