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Making Tax Digital (MTD) is at the core of HMRC’s plan to become one of the most digitally advanced tax administrations in the world. First announced in March 2015, the plan is to simplify tax by replacing existing processes with digital record keeping, and submitting tax returns digitally throughout the year.

Do Making Tax Digital (MTD) rules affect me?

You’ll need to be aware of the MTD rules if you:

To help businesses adjust to the changes, the new rules are launching in stages for different types of tax return.

When will MTD rules apply to me?

The new Making Tax Digital legislation comes into force in stages depending on the type of tax return, and will eventually apply to VAT, self-employed income, and Corporation Tax returns.

Expected MTD start date Who the MTD rules will apply to
April 2019 MTD for VAT: Rules take effect for businesses with a taxable turnover above the VAT threshold (currently £85,000) submitting their VAT return for accounting periods from this date onwards.
April 2022 MTD for VAT: MTD legislation takes effect for all VAT registered businesses submitting their VAT return.
April 2026 MTD for Income Tax Self Assessment (ITSA): Expected to roll-out to sole traders and landlords, replacing annual Self Assessment tax return. You can also voluntarily sign-up to the scheme early.
To Be Confirmed MTD for Corporation Tax: The anticipated start date for submitting Company Tax Returns under MTD rules has not yet been confirmed.

 

Check out our Making Tax Digital Information Hub for more information.

Will I need special software for MTD?

You’ll need to keep your accounting records digitally, and submit your tax information to HMRC using special software. You’ll either be able to submit directly from your record-keeping software, or will need to use bridging software to make the actual submission.

What are the benefits of Making Tax Digital?

The government believes that MTD will make life easier for businesses and HMRC, improving efficiency, and making it easier to comply. Other predicted benefits include:

Don’t ignore MTD until it becomes compulsory! Talk to one of the team about our online accounting services, including help with your tax return. Call 020 3355 4047 or get an instant online quote.

About The Author

Beth-Anne Bruce

I'm an experienced and fully AAT and ACCA qualified accountant, who is enthusiastic about helping business owners succeed. I also love cooking and needlepoint (at different times!). Learn more about Beth.

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Confirm Transactions

The number of monthly transactions you have entered based on your turnover seem high. A transaction is one bookkeeping entry such as a sale, purchase, payment or receipt. Are you sure this is correct?

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VAT Returns

It is unlikely you will need this service, unless you are voluntarily registered for VAT.

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