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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.

The initial focus of the programme was targeted on VAT.

MTD for VAT regulations had two phases and therefore came with two corresponding deadlines:

  • VAT-mandated businesses were required to meet phase one by April 2019.
  • As of April 2022, all VAT-registered businesses are required to engage with MTD for VAT.

The next focus of MTD is income tax:

  • Any unincorporated trader or property landlord with gross income in excess of £10,000 will be required to make quarterly submissions starting in April 2023.
  • To support this, there will be an extensive pilot run by HMRC starting in April 2021.

The final focus area of MTD will be corporate tax:

  • Whilst it is early days in the process HMRC has confirmed this will not occur before April 2026.
  • A pilot to support mandation is expected starting in April 2024.

Making Tax Digital software for accountancy practices

Provide an even better service to your clients with powerful workflow, analysis and communication tools. Manage the complete compliance process — from totalling and categorising data ready for MTD, to collecting data from HMRC and producing the final, adjusted accounting data.

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