This article explains how to get started with MTD IT in Capium, including how to handle new clients and existing clients already in your system.

It is designed for accountants and bookkeepers who want a clear, practical understanding of the end-to-end MTD IT journey, from client setup through to quarterly submissions and final declaration.

Before You Start: Key Concepts to Understand

Before setting up your first MTD IT client, it’s important to understand how MTD IT works in practice.

1. MTD IT is cumulative

  • Each quarterly submission is year-to-date, not standalone

  • HMRC receives cumulative totals from 6 April to the end of the quarter

  • If something is missed earlier, it is corrected in a later quarter, not resubmitted

This is different from VAT and is critical to understand.

2. Digital records come from a source system

Capium does not replace your bookkeeping judgement.

Digital records can come from:

  • Capium Bookkeeping

  • Capium 365

  • Manual Bridging entry (where appropriate)

MTD IT uses these records for reporting, but the source system remains the primary record.

3. Some actions do not sync back

Changes made in MTD IT (for example, marking an expense as disallowable) may:

  • Affect the MTD IT submission

  • Not automatically update bookkeeping or 365

Best practice is always to correct data at the source.

Step 1: Client Setup (New vs Existing Clients)

New Clients (Recommended Approach)

For brand new clients:

  1. Create the Individual first

  2. Link a Sole Trader business to the Individual
    (The sole trader is treated as a source of income)

  3. Add core details (NI number, UTR, contact details)

  4. Confirm the client appears in Bookkeeping / 365 as expected

This ensures the client structure aligns with how MTD IT works.

Existing Clients Already in Capium

If the client already exists:

  • Review how they are currently set up

  • Confirm the Individual and Sole Trader relationship is correct

  • Ensure bookkeeping data is clean before starting MTD IT

  • Do not assume historic data is MTD-ready

Existing clients can be enrolled into MTD IT without disrupting their prior Self Assessment history.

Step 2: Importing the Client into MTD IT

Once the client is ready:

  1. Go to MTD IT

  2. Import the client from MyAdmin

  3. Start HMRC authorisation

  4. Complete the HMRC connection and confirm authorisation

  5. Sync business information from HMRC

You cannot create MTD IT records until the business information is successfully synced.

Step 3: Creating and Managing Quarterly Periods

Once authorised:

  • Quarterly periods are created automatically

  • Each quarter represents a reporting window, not a fixed dataset

  • You can:

    • Import digital records

    • Add manual records (where required)

    • Review summaries before submission

Step 4: Digital Records and Disallowable Expenses

Importing Digital Records

You can import records from:

  • Bookkeeping

  • Capium 365

Records imported from source systems:

  • Cannot be edited or deleted in MTD IT

  • Must be corrected at the source if wrong

Disallowable Expenses

  • Disallowable status may be suggested based on account mapping

  • You may adjust this in MTD IT for reporting purposes

  • This change does not automatically update bookkeeping

Best practice:

If something is disallowable, fix it in bookkeeping as well.

Step 5: Locking a Period (Optional but Recommended)

You can lock a period once you are confident the data is correct.

When a period is locked:

  • No new records can be imported

  • No edits can be made

  • This supports audit control and internal governance

Locking does not submit data to HMRC — it only controls editing.

Step 6: Submitting a Quarterly Update

To submit a quarter:

  1. Review the Summary of Each Category

  2. Review the Cumulative Summary

  3. Confirm the data is correct

  4. Submit to HMRC

Once submitted:

  • The quarter is marked as submitted

  • Records used in that submission cannot be deleted

Step 7: Missed or Late Transactions

If a transaction is missed after a quarter has been submitted:

  • Do not amend the previously submitted quarter

  • Add or correct the transaction in a later quarter

  • It will be included in the next cumulative submission

This is expected behaviour under MTD IT and mirrors HMRC guidance.

Step 8: Null Returns

If no income or expenses exist for a quarter:

  • Capium will prompt you to submit a null return

  • This confirms to HMRC that no activity occurred

  • Null returns are valid and supported

Step 9: Final Declaration (End of Year)

At year end:

  1. Review cumulative data

  2. Add any additional information required (where applicable)

  3. Review estimated tax figures

  4. Submit the Final Declaration to HMRC

Once submitted:

  • Submission status and date are shown

  • HMRC confirmation is recorded within Capium

Important Notes and Limitations

  • MTD IT does not replace professional judgement

  • Not all income types are currently mandated under MTD IT

  • Eligibility decisions remain the responsibility of the accountant

  • HMRC APIs and rules will continue to evolve

Capium will continue to update the product as HMRC expands MTD IT requirements.

This article covers the core end-to-end journey.

Additional detailed guides will be available for:

  • Disallowable expenses

  • Missed transactions

  • Working with existing clients

  • Advanced reporting

  • Practice management integration