Making Tax Digital
What you need to know
Making Tax Digital (MTD) is a Government initiative aimed at making the tax system more efficient and effective. It requires taxpayers to use a secure online tax account to register, file, pay, and update tax information digitally. Non-compliance may result in fines or penalties.
MTD for VAT
All VAT-registered businesses are now automatically enrolled in MTD for VAT. If your business is VAT-registered, you must use compatible software to maintain digital VAT records and file VAT returns quarterly.
MTD for Income Tax
MTD for Income Tax Self-Assessment (ITSA) has been delayed until April 2026. Self-employed individuals and landlords with an income over £50,000 will need to comply first, followed by those earning over £30,000 in 2027.
MTD for Corporation Tax
HMRC plans to introduce MTD for Corporation Tax in 2026. The system is still under development, with a pilot programme expected before it becomes mandatory.
MTD-Compatible Software
If your accounting software is MTD-compatible, you can file VAT returns directly with HMRC and receive confirmation. Our Cloud Accounting team can help you find the right software for your business and guide you through the transition.
Next steps for businesses
As the deadlines for Making Tax Digital approach, businesses must prepare by adopting compatible cloud accounting software and adjusting their processes for recording and reporting tax information.
Get ahead of the changes now
Our Cloud Accounting experts are here to help you navigate MTD, choose the right software, and ensure you’re fully compliant. Contact us today on 01743 241281 or email xero@dykeyaxley.co.uk to get started.