Making Tax Digital
Find out how Making Tax Digital (MTD) affects you, what you need to do, and how we can help you navigate the change.
What is MTD?
MTD is a Government initiative that aims to transform and digitalise the UK’s tax administration system. It is part of HMRC’s long-term vision to:
- Ensure businesses have increase confidence in getting tax right
- Reduce scope for error and reduce time checking submissions
- Improve certainty and control
- Support digital integration
How does MTD affect me?
To comply, you will need to use HMRC approved compliant software to digitalise the way you keep your books.
VAT was the catalyst for Making Tax Digital in 2019, requiring all businesses with the taxable turnover above the VAT threshold to comply. In 2022, all voluntary VAT registered businesses were also required to join MTD.
As of November 2022, the HMRC VAT portal has closed and unless an exemption is granted, HMRC will automatically move businesses over.
Income Tax Self-Assessment
From April 2026, all self-employed individuals and landlords with annual business or property income above £50,000 will need to follow the rules for Making Tax Digital for Income Tax Self Assessment.
A year later in April 2027, individuals and landlords with total income between £30,000 and £50,000 will then be required to comply.
This will revolutionise the tax return process, as all affected individuals will need to submit quarterly returns of summarised income and expenditure. Gone are the days of producing a single yearly return only in the depths of January.
We look forward to MTD for Corporation Tax being introduced, more details will be released as and when we have them.