What is Making Tax Digital?

MTD is HMRC’s plan to digitise the tax system for VAT, Income Tax Self Assessment and Corporation Tax for both businesses and individuals.

HMRC’s ambition is to become one of the most digitally advanced tax administrations in the world. Making Tax Digital is making fundamental changes to the way the tax system works – transforming tax administration so that it is:

* more effective

* more efficient

* easier for taxpayers to get their tax right

How will Making Tax Digital impact you?

If you’re using spreadsheets, you’ll either need to use bridging software or start using HMRC-recognised commercial software instead. The easiest way is to use a professional accountant to handle your tax affairs.

Deadlines for Making Tax Digital

April 2022

MTD for VAT

UK VAT-Registered businesses with a taxable turnover above £85,000 are required to keep digital records and to use compatible digital software to submit VAT returns. This legislation came into force in April 2019. MTD will be extended to apply to all UK VAT registered businesses from 1 April 2022, regardless of turnover.

April 2024

MTD for Income Tax Self Assessment

MTD for Income Tax Self Assessment will apply for all self-employed business owners and landlords with annual income over £10,000.

April 2025

MTD for Income Tax Self Assessment

MTD for Income Tax Self Assessment will apply for general partnerships with an annual turnover of over £10,000.

April 2026

MTD for Corporation Tax

Making Tax Digital for Corporation Tax to be introduced at the earliest.