Making Tax Digital
Making Tax Digital or MTD is part of the government’s 10-year plan to help taxpayers make accurate tax returns and to keep up to date with their tax affairs.
Keeping digital records and sending updates to HMRC directly using ‘compatible software’ is intended to reduce errors, costs, and uncertainty by making tax part of everyday record-keeping.
MTD for VAT
MTD for VAT was first introduced in 2019 for businesses over the VAT threshold of £85,000 and it became a requirement for all VAT registered businesses in 2022.
MTD for ITSA
From April 2026 businesses and landlords with an annual income of £50,000 or more will need to be registered for MTD for Income Tax Self Assessment (ITSA) and provide quarterly summaries to HMRC.
MTD for Corporation Tax
The government is currently reviewing results of a consultation about MTD for Corporation Tax which it launched in 2020. It is not expected to come into effect before April 2026 and there will probably be an opportunity to take part in a pilot scheme before it is launched.