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HMRC’s Making Tax Digital (MTD) initiative is fundamentally changing UK tax systems and processes for businesses. MTD provides a modern, digital service that makes it easier for businesses to get their tax right the first time, not only reducing tax lost due to avoidable errors, but also reducing the cost, uncertainty, and worry that businesses face when HMRC is forced to intervene to put things right.
Following the initial launch of MTD for VAT in 2019, an extension to the regulations from 1 April 2022 mean these now apply to all VAT-registered including those with taxable turnover below the VAT threshold.
The next focus of MTD is income tax:
- Any unincorporated trader or property landlord with gross income in excess of £50,000 will be required to make quarterly submissions starting from April 2026. The income threshold will be lowered to £30,000 from April 2027.
- The date when partnerships will be mandated is not yet confirmed.
- Leading up to the mandation date, HMRC is running a pilot scheme that will gradually increase in scope and numbers of participants.
The final focus area of MTD is corporate tax:
- As with partnerships, the date when companies will be mandated is not yet confirmed.
- A pilot is expected although a start date has not been confirmed.
Making Tax Digital solutions to help accountants navigate MTD
- Manage totalling and categorising of data ready for MTD; collect data from HMRC; and produce the final, adjusted accounting data.
- MTD for Income Tax for Traders and Landlords will be mandated from April 2026, meaning landlords and unincorporated traders with gross income in excess of £50,000 will be required to make their first quarterly update by 5 August 2026. The income threshold will be lowered to £30,000 from April 2027.
- MTD for partnerships and companies will follow at a later date.
- As one of the first providers to support agents in taking part in the HMRC income tax pilot, Thomson Reuters continues to work closely with HMRC and accountants to develop solutions for the new MTD regime.
For more MTD resources visit our Making Tax Digital hub. Here you will find resources to help your clients through the process and provide thought leadership to help you stay up to date.Explore Making Tax Digital software for accountancy practices
Making Tax Digital software for corporations
Thomson Reuters ONESOURCE Indirect Tax Compliance fully supports the requirements of Making Tax Digital. The software delivers significant process improvements and robust risk management – giving you full confidence in your VAT operations for MTD and any future regulations.Explore Making Tax Digital software for corporations