MAKING TAX DIGITAL

What is MTD?

Making Tax Digital (MTD) is a fundamental change to the UK tax system.  It is a Government-led plan designed to make it easier for individuals and businesses to calculate how much tax they owe.  Every individual and business will have their own on-line Personal Tax Account.

Making TAX Digital for VAT (MTDfV)

Since April 2019, most VAT-registered taxpayers with a taxable turnover above the VAT threshold of £85,000 have been required to operate Making Tax Digital for VAT (MTDfV).

In July 2020, the Government announced a series of reforms to Making Tax Digital and these are highlighted below:

1. Making Tax Digital for VAT (MTDfV)

From April 2022, all VAT registered businesses must follow these rules regardless of turnover for their first return on or after 1 April 2022.

This includes those business who currently have an exemption or who are intending to apply for one.

Such business can already sign up voluntarily through the GOV.UK website.

2. Making Tax Digital for ITSA

MTD ITSA will now be introduced in phases from 6 April 2026

3. Making Tax Digital for Corporation Tax

Further announcements to follow from UK Government