The short answer
Open Money and choose Add transaction for one record, or Add multiple for several at once. Enter the date, amount and whether it is income or an expense. On Simple that is enough. On Detailed, choose a category too. Your records feed your quarterly update, and bookkeeping is free.
Is this the right guide?
Use this guide if you want to keep your Making Tax Digital records in SimpleTaxFlow instead of a spreadsheet, or to add records after a spreadsheet upload. It works for self-employment and UK property, including property you own jointly.
If you keep a spreadsheet and only want to send totals, use the guide to importing your spreadsheet figures instead.
What you need
You need a SimpleTaxFlow account. You do not need a spreadsheet. You add each record yourself.
If you upload a spreadsheet for part of the year, Money carries on from the day after your Figures up to date.
What HMRC needs from a digital record
Under Making Tax Digital for Income Tax, each record of income or an expense must be kept in compatible software. It needs the amount, the date and a category. The categories are the same as in Self Assessment. You still keep original documents such as invoices and bank statements.
HMRC says to record transactions as close to the date as possible. Each record must exist before the update deadline for its period, or before you send the update if that is earlier. Keep your records for at least 5 years after the 31 January deadline for the tax year.
Simple or Detailed: how much detail you record
HMRC calls the lighter option simpler categorisation. It applies to each income source with turnover under £90,000. A sole trader then only needs to record whether each transaction is income or an expense, and HMRC receives total income and total expenses for that source. In SimpleTaxFlow this is Simple.
Residential landlords still record finance costs, such as mortgage interest, separately. If turnover reaches £90,000, or you are unsure whether it will, HMRC says to record full categories. In SimpleTaxFlow this is Detailed.
1. Open Money
Open Money. The page opens on To confirm. Add transaction is at the top of the page.
Open Money2. Answer the turnover question if asked
The first time you add a record for a business and tax year, you are asked whether you expect turnover to be £90,000 or more. Choose No, use Simple or Yes, use Detailed. Until you answer, records need a category.
Open Money3. Add one record
Choose Add transaction. Choose Expense or Income. Enter the Description, Amount (£) and Date. Choose a Category if you are on Detailed. Choose the Business and, for rental records, the Property. You can attach a receipt or invoice. Then choose Add transaction.
Open Money4. Add several records at once
Open Dates, capture and period checks. In Add records another way, choose Add multiple. Fill in Date, Description, Amount £, In / Out and Category for each row. Press Enter on the last row or choose Add row for another. Then choose Save, which shows how many transactions you are adding.
Open Money5. Keep residential finance costs separate
Landlords choose the Residential Finance Costs category for mortgage interest and other finance costs on residential lets. Do this on Simple and on Detailed.
Open Money6. See your records in the quarterly update
Open Tax and choose Check update. Check your figures adds your Money records to any spreadsheet upload for the year so far.
Open TaxA worked example
Leo (fictional) is a mobile hairdresser on Simple. Every Friday he opens Add multiple and enters the week. Each day’s takings go in as In, one row a day. An order of hair products goes in as Out. He chooses Save 6 transactions and they appear in his quarterly update.
Because his records feed the update directly, Leo does not retype anything at the end of the quarter. He opens Check update and checks the totals.
- Takings, Monday to Friday (5 rows, In)
- £1,000
- Hair products (1 row, Out)
- £100
- Profit for the week
- £900
- Income for the quarter so far
- £13,000
- Expenses for the quarter so far
- £1,300
The figures are fictional and rounded.
Common mistakes
- Adding records dated inside the period your spreadsheet already covers. Money refuses them.
- Choosing the wrong Business when you run more than one, so figures land in the wrong update.
- Recording mortgage interest on a residential let as an ordinary expense instead of Residential Finance Costs.
- Adding personal spending, such as money you take out for yourself, as a business expense.
How to check it worked
Each new record shows in Money. On Simple it is confirmed when you save it. On Detailed it stays in To confirm until it has a category. Then open Tax, choose Check update and check that Income and Expenses in Check your figures include your new records.
Before you move on
- Add every business income and expense
- Choose a category if you are on Detailed
- Use Residential Finance Costs for mortgage interest on residential lets
- Date Money records after your spreadsheet Figures up to date
- £29.99 + VAT a year. Bookkeeping is free. Pay when you send to HMRC.
Frequently asked questions
Is adding income and expenses free?
Yes. Adding, correcting and exporting records is free. You only pay to send to HMRC, which costs £29.99 + VAT a year.
Why was my record refused for a date my spreadsheet covers?
Your spreadsheet already includes that date. Money starts the day after Figures up to. To change earlier figures, correct the spreadsheet and upload it again in Tax.
What happens to a record without a category?
On Simple, it is confirmed when you save it. On Detailed, it waits in To confirm until you choose a category.
Do I have to record every sale separately?
Not always. HMRC lets retailers record daily gross takings instead of each sale. Each record still needs the amount, the date and a category.
How long do I keep my MTD records?
HMRC says to keep your digital records for at least 5 years after the 31 January submission deadline for the tax year. Keep original documents such as invoices and bank statements too.
Check the official rules
Tax rules can change and individual circumstances matter. Use HMRC’s current guidance to confirm the treatment that applies to you.
Put the guide into practice.
Open the relevant workspace and complete the next step with this guide available in another tab.