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Making Tax Digital Support Centre

Q: When does MTD for Income Tax become compulsory?

It will come into effect from 6th April 2024 for sole traders and landlords.

Use our information hub and FAQs to learn more about Making Tax Digital, and what it means for your business. Get free online resources for sole traders, limited companies, and VAT registered businesses dealing with MTD.

MTD for VAT

Make sure your VAT registered business is compliant with the rules for Making Tax Digital for VAT, which became compulsory from April 2022.

Income Tax and MTD

Plan ahead for the launch of Making Tax Digital for Income Tax Self Assessment (MTD ITSA) on 6th April 2026 for self-employed businesses and landlords.

MTD for Corporation Tax

Prepare your limited company and stay up to date with plans for Making Tax Digital for Corporation Tax which is currently planned to come into force in 2026.

FAQs

MTD Corporation Tax

When does MTD for Corporation Tax start?

At the moment this is still in the consultation and design stage. The current expectation is that this will come into force for limited companies from 2026.

MTD for Income Tax

When does MTD for Income Tax become compulsory?

It will come into effect from 6th April 2026 for sole traders and landlords.

Can I register for Income Tax MTD early?

You can voluntarily follow the rules now, as long you’re a UK resident who is registered for Self Assessment. You must be a sole trader with income from only one business, or a landlord who only has UK property (or both!).

What records do I need to keep?

You’ll need to keep financial records like you normally would, showing all of your income and expenses from your self-employed or landlord business. These will need to be kept digitally, with software that’s compliant with MTD.

Will I still need to submit Self Assessment tax returns?

Once you start using MTD for Income Tax you’ll use this to send Income Tax updates to HMRC instead of submitting a Self Assessment tax return.

MTD for VAT

What does MTD for VAT mean?

It stands for Making Tax Digital for VAT. It’s the name of the rules which require VAT-registered businesses to keep their financial records digitally and submit their VAT returns using MTD-compliant software.

When did MTD for VAT start?

VAT registered businesses with a taxable turnover above £85,000 were affected from the first VAT period starting on or after 1 April 2019. The scheme was extended on 1st April 2022 and now includes all VAT-registered businesses.

Is MTD for VAT compulsory for all businesses?

Yes, Making Tax Digital rules became compulsory for all VAT-registered businesses from April 2022.

Is there any free MTD for VAT software?

There is indeed. Pandle allows you to track and manage your VAT, and submit your returns straight to HMRC, all for free.

Does it matter which VAT scheme I use?

No, eligibility rules for the various VAT schemes won’t change, and won’t affect your VAT return through MTD.

What does taxable turnover for MTD mean?

Taxable turnover means the same thing for MTD as for VAT registration. It’s the total value of everything you sell that is not exempt from VAT.

What are the late submission penalties for MTD VAT?

With Making Tax Digital (MTD) for VAT fully implemented for VAT registered business, HMRC will introduce changes to the existing VAT penalty system. The new MTD for VAT penalty system will apply from January 2023, but there is an existing penalty scheme in place. We explain the new rules (and the current processes) in our article about VAT penalties.

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Get help with MTD

Use our free online resources and guides to Making Tax Digital to get the help your business needs to stay compliant.

As an online accounting firm, we’re always available to provide accurate, reliable answers to frequently asked MTD questions.

Call 020 3355 4047 to talk to your accountant, or get an instant online quote to learn more about becoming a client.

Free MTD software

All our clients have full access to refreshingly simple bookkeeping software, Pandle – for free! It’s easy to use, and fully MTD compliant, helping you to save time and reduce the risk of errors in your tax returns.