Making Tax Digital is a government initiative setting out a vision for a digital tax system, designed to “make it easier for individuals and businesses to get tax right and keep on top of their affairs”.
The first stage began on 1 April 2019 with MTD for VAT, and it has applied to all VAT-registered businesses since April 2022. It covers every type of business that files VAT returns with HM Revenue & Customs: sole traders, partnerships, limited companies and even clubs and charities. The VAT registration threshold is now £90,000.
From 6 April 2026, Making Tax Digital for Income Tax applies to sole traders and landlords with qualifying income over £50,000. They need to keep digital records and send quarterly updates to HMRC using compatible software, with the threshold falling in later years.
The MTD timeline
April 2019
MTD for VAT begins
VAT-registered businesses above the registration threshold start keeping digital records and filing VAT returns through compatible software.
April 2022
All VAT-registered businesses
MTD for VAT extends to every VAT-registered business, whatever its turnover.
April 2026
MTD for Income Tax
Sole traders and landlords with qualifying income over £50,000 keep digital records and send quarterly updates to HMRC.
April 2027
Threshold falls to £30,000
Sole traders and landlords with qualifying income over £30,000 come into MTD for Income Tax.
April 2028
Threshold falls to £20,000
Qualifying income over £20,000 brings more sole traders and landlords into scope.
How we can help
- If you already use accounting software but need to upgrade to be compliant
- If you currently use only spreadsheets
- If you currently keep your records on paper
Our Business Services support team can help with any concerns about making sure your business complies with MTD. As a firm we have invested in training and partnered with a range of software providers so we can offer the best solution for your business.
Thresholds and dates are set by HMRC and can change, so please speak to us about your own circumstances.