Create Digital Records for MTD: Minimum Data You Must Keep (with Examples)
If you are preparing for Making Tax Digital for Income Tax Self Assessment (MTD for ITSA), one of the most important changes is how you keep your records.
Instead of relying on paper notes or end-of-year summaries, HMRC requires you to keep digital records using software. But what does that actually mean in practice?
This guide explains what digital records are, what information you must keep, and shows simple examples of digital records based on HMRC guidance.
What Are Digital Records for MTD for ITSA?
In simple terms, digital records are a structured way of recording your income and expenses using software. According to HMRC guidance, you must keep digital records of your:
• self-employment income and expenses
• property income and expenses
These records can be kept in:
• accounting software
• spreadsheets (if linked to software)
The key requirement is that the information is stored digitally and can be used to send updates to HMRC.
What Information Must You Keep in Digital Records?
What you need to keep depends on your accounting method. In general, HMRC expects your digital records to include enough detail to show the income or expense amount, category, and the relevant transaction date.
For traditional accounting, keep:
• income/expense amount
• income/expense category (check what categories HMRC expects for income and for expenses)
• invoice or transaction date
For cash basis, keep:
• income/expense amount
• income/expense category (check what categories HMRC expects for income and for expenses)
• payment date, when the money was actually received or paid
Minimum Data for Income Records (With Examples)
From the previous section, you already know that your digital records need to include the income amount, the income category, and, depending on your accounting method, either the transaction date or the payment date.
Now, let’s look at a few examples.
Example: Self-Employment Income Record
Accounting method: cash basis
| Payment date | Description | Amount | HMRC Category |
| 10 May 2026 | Invoice #102 – Design services | £500 | Turnover |
| 15 May 2026 | Invoice #103 – Consulting | £300 | Turnover |
These entries show clearly when the income was received and what it relates to.
Example: Property Income Record
Accounting method: cash basis
| Payment date | Description | Amount | HMRC Category |
| 1 May 2026 | Monthly rent – Flat A | £900 | Period amount |
| 1 June 2026 | Monthly rent – Flat A | £900 | Period amount |
These entries show clearly when the rental income was received and what it relates to.
Example: Self-Employment Income Record
Accounting method: traditional accounting
| Issue date | Description | Amount | HMRC Category |
| 10 May 2026 | Invoice #102 – Design services | £500 | Turnover |
| 15 May 2026 | Invoice #103 – Consulting | £300 | Turnover |
These entries show clearly when the invoice was issued and what the income relates to.
Example: Property Income Record
Accounting method: traditional accounting
| Issue date | Description | Amount | HMRC Category |
| 1 May 2026 | Monthly rent – Flat A | £900 | period amount |
| 1 June 2026 | Monthly rent – Flat A | £900 | period amount |
These entries show clearly when the rental income was issued and what it relates to.
In EasyInvoice, you can record both the issue date and the payment date, regardless of your accounting method. Apart from your obligation to submit Quarterly Updates, you probably still want to keep both dates in your records.
However, the date we use to recognise income or expenses depends on your accounting method. As mentioned before, with traditional accounting, income and expenses are counted on the transaction date (issue date). With cash basis, income and expenses are counted only when you add the payment date.
Minimum Data for Expense Records (With Examples)
HMRC also requires you to keep digital records of your expenses. For each expense, your digital record should include:
• the date of the expense
• the amount paid
• the category of expense
The date you record depends on the accounting method you use. If you use cash basis, record the payment date. If you use traditional accounting, record the issue date from the invoice or bill.
Example: Self-Employment Expenses
Accounting method: cash basis
| Payment date | Description | Amount | HMRC Category |
| 12 May 2026 | Printer ink | £45 | Administrative costs |
| 18 May 2026 | Train ticket for the client | £30 | Car, van and travel expenses |
These entries show clearly when the expense was paid and what it relates to.
Example: Property Expenses
Accounting method: cash basis
| Payment date | Description | Amount | HMRC Category |
| 20 May 2026 | Plumbing fix | £120 | Repairs and maintenance |
| 25 May 2026 | Cleaning service | £80 | Cost of services |
These entries show clearly when the property expense was paid and what it relates to.
Example: Self-Employment Expenses
Accounting method: traditional accounting
| Issue date | Description | Amount | HMRC Category |
| 12 May 2026 | Printer ink | £45 | Administrative costs |
| 18 May 2026 | Train ticket for the client | £30 | Car, van and travel expenses |
These entries show clearly when the invoice or bill was issued and what the expense relates to.
Example: Property Expenses
Accounting method: traditional accounting
| Issue date | Description | Amount | HMRC Category |
| 20 May 2026 | Plumbing fix | £120 | Repairs and maintenance |
| 25 May 2026 | Cleaning service | £80 | Cost of services |
These entries show clearly when the invoice or bill was issued and what the property expense relates to.
Do You Need to Record Every Transaction?
HMRC allows some flexibility depending on the type of business. For example, if you run a business with many small daily transactions (such as retail), you may record daily totals instead of individual sales.
However, the key principle remains the same: your digital records must accurately reflect your income and expenses.
What Categories Should You Use?
HMRC expects income and expenses to be grouped into categories when submitted. Common categories include:
• income (sales or rent)
• office costs
• travel expenses
• repairs and maintenance
You do not need to overcomplicate this. The goal is to keep records in a way that can be summarised correctly for reporting.
You can find more details about the HMRC categories used for MTD for Income Tax in our guides to income and expense categories. These guides explain what each category means and can help you choose the right one for your records.
Why Digital Records Matter for MTD
Digital records are the foundation of MTD for ITSA. HMRC uses these records to:
• calculate totals for income and expenses to generate quarterly updates
• support your final tax submission
This means your records are not just for your own tracking – they are directly used for reporting.
Keeping Digital Records in Practice
Using an HMRC-recognized app like EasyInvoice can make this process easier by helping you:
• record income as you create sales invoices
• record income that does not require an invoice (for example, when your customer does not need one or when you want to record your total daily sales as a retailer)
• record expenses and attach photos of receipts and invoices
• record payments in two simple taps
• check the list of digital records used to calculate your Quarterly Update
• send Quarterly Update to HMRC
• export your digital records when needed
• check the history of updates sent to HMRC
• check your tax estimate for a given tax year
This reduces the need to reconstruct your records later. You can start recording your transactions, organising your data, and building your digital records from day one.
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