HMRC have been evolving Making Tax Digital (MTD) over the last few years, but did you know that the next stages are set to be brought in soon? We briefly go over what MTD is, the upcoming changes and what you need to know to get ready below.
What is MTD?
HMRC’s aim of MTD is to bring tax into the modern and digital age, moving away from annual paper submissions to online submissions done quarterly.
This does mean that going forwards digital records will need to be kept for anyone filing self-assessments, which will need to be done using compatible software.
Who will Be Affected?
MTD for self-assessment is already in the beta testing stage and you can opt in already. However, for landlords or sole traders falling into the following categories MTD will become mandatory.
- From April 2026 for those with income over £50,000
- From April 2027 for those with income over £30,000
How to get ready for MTD
If you are already using cloud accounting software, then changing to MTD won’t be a major challenge as you will already be set up to make the quarterly submissions. However, if you are still using the pen and paper method you will need to investigate moving to a cloud-based accounting software.
To be compliant with MTD you will need the following:
- Keep records in a digital format on MTD compatible software
- Provide digital quarterly updates to HMRC
If you have any questions or would like help to get set up for MTD then please get in touch with us.
