MTD for income tax and agent services accounts: What every accountant must know

Whether you’ve been prepping for Making Tax Digital for income tax (MTD IT) from the start or you’re just getting your head around what’s required, one thing is certain: if you’re going to be submitting MTD for income tax returns on behalf of clients, you need to ensure that your clients are set up on your agent services account (ASA).

If that term sounds unfamiliar or you’ve been putting off getting one set up, now’s the time to get it sorted. It’s an easy thing to do and once it’s done, you’ll be set up and ready to manage MTD submissions.

What exactly is an ASA?

An ASA is HMRC’s way of linking a tax agent to their clients digitally. It’s basically your firm’s digital handshake with HMRC.

If you’re acting on behalf of clients under MTD (for VAT or income tax), this account is what enables you to access the relevant services.

It’s worth noting that the ASA is not the same as your old HMRC online agent account. The older system still exists for things like self assessment and pay as you earn (PAYE), but MTD submissions have their own digital ecosystem, and the ASA is your key to it.

Who needs one?

If you’re an agent submitting MTD returns for clients, you need an ASA. Simple as that. This includes accountants, tax advisors and bookkeepers. Even if you’ve been working with HMRC online services for years, MTD requires this separate registration.

One point of confusion we often hear is whether every team member needs their own ASA, and the answer is no.

HMRC advises that firms should register just one ASA per practice. It’s linked to the firm, not to individual staff. This centralises control and makes sure there’s consistency across client submissions.

What are the rules?

To operate within the MTD framework, you’ll need to use MTD-compatible software. This means the software must be able to maintain digital records and communicate with HMRC’s systems via their APIs. The ASA allows you to link your software with HMRC’s system to make those submissions.

Once your ASA is up and running, you’ll also need to link your existing client authorisations to it. There’s a special process for migrating your client relationships, but the key point is not to expect your old authorisations to carry over automatically. There’s a bit of admin involved to get everything synced, but it only needs to be done once.

Another thing to remember is that HMRC’s systems are set up expecting each firm to use just one ASA. Creating multiple accounts for the same firm can cause all sorts of headaches, especially when linking software or migrating client authorisations. So, it’s best to set up just one and make sure everyone in your team works under that single umbrella.

A step-by-step guide

Ready to get started? Setting up an ASA is straightforward if you follow these steps.

Step 1: Head to the HMRC website

Go to the official HMRC page to set up an ASA. A quick search for “Create an agent services account” will get you to the right place.

If you already have a HMRC online services account and have at least one authorised client, you can immediately create an ASA.

Step 2: Have your Government Gateway credentials ready

You’ll need the Government Gateway ID and password that your firm uses for HMRC services. This must be a business (not individual) account.

Step 3: Confirm your identity and business details

You’ll be asked for key details including:

• Your Government Gateway user ID and password

• The Unique Taxpayer Reference for your firm (UTR)

• The postcode associated with your firms UTR

• Your company registration number, if you have one

• Your VAT registration number, if you have one

• Your National Insurance number and date of birth to confirm your identity if you’re a sole trader or business partnership

• Your National Insurance number and date of birth to confirm your identity if you’re a limited liability partnership

• The name of your anti-money laundering supervisory body, membership number and renewal date

Step 4: Receive your ASA credentials

Once registered, HMRC will provide you with a new Government Gateway ID specifically for the ASA. Make sure you store this securely as it’s the login you’ll use for accessing MTD services.

Step 5: Link your MTD-compatible software

Using the credentials from your ASA, you’ll be able to authorise your MTD software to interact with HMRC. Most major software providers will guide you through this process from within their own platform.

To do this within BrightBooks you would;

• Navigate to Settings > MTD > MTD ITSA Setup.

• You’ll be redirected to the HMRC website and prompted to ‘Allow your software to connect with HMRC’.

• Sign into the HMRC online service using your user ID and password.

• You will be asked to grant BrightBooks permission to access and update the self-assessment details.

• You will be redirected back to BrightBooks MTD ITSA setup, where you must enter the business’s National Insurance Number (NINO).

Upon entering a valid NINO, the system will automatically retrieve the corresponding MTD Tax ID, Accounting Method (Accruals or Cash), Tax Quarter (Standard or Calendar), and Tax Year (e.g., 2025-26). Click Save to save your settings and close the setup screen.

Step 6: Authorise your clients

This is where you link your ASA with the clients whose MTD filings you’ll be managing. HMRC has a dedicated system for authorising clients for MTD services, and you’ll need to send them an invitation and get their approval.

ASA sorted? Let Bright handle the rest. Bright makes MTD submissions simple with powerful, compliant software built for accountants.

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This content may have been developed with the assistance of AI tools. Content is reviewed by a member of the Bright team before publication. Guidance on legislation can be obtained from your industry body.