Making tax digital

Making Tax Digital (MTD) is a government initiative to make it easier for people and businesses to get tax right by keeping and submitting digital records. It makes the tax system (and how it’s administered) more effective, more efficient and easier to understand. 

VAT

The first stage of MTD was introduced in 2019. Since 1 April 2022 all VAT-registered businesses have been required to keep digital records and use MTD-compatible software to submit VAT returns electronically.  

Income tax

Self-employed business owners and landlords with annual business or property income above £50,000 will need to follow new MTD rules for income tax from 6 April 2026.

Those with an income of more than £30,000 will have to follow the rules from April 2027. Partnerships will be required to join at a date yet to be announced. 

Corporation tax

A consultation has been published on MTD for corporation tax and you’ll also have the chance to take part in a pilot. No one will have to use it before 2026.

Better use of information

You won’t have to give HMRC information twice. Employers, banks, building societies and other government departments will all feed their information into one place.

Tax in real time

HMRC will deal with anything affecting tax as close to real time as possible, to help prevent errors and stop tax due or any repayments you owe building up.

A single financial tax account

You’ll see a comprehensive financial picture in your digital account. It’ll be like online banking but with a personalised picture of your tax.

Digital contact with customers

Business owners will get prompts, advice and support through webchat and secure messaging.