Making Tax Digital has been around now in one shape or another for a couple of years now. It has been delayed at various stages of its implementation, but whether we like it or not, it is now here to stay.

“MTD” rules say is in summary, businesses must keep digital records by using software. This software then is used to submit various information directly to HMRC. Software is usually (but doesn’t need to be) cloud based, so Quickbooks, Xero and the like.

The first mandatory implementation for MTD was in April 2019 to submit VAT returns and applied to businesses who are VAT registered with turnover above £85,000. If you fall into this category and you’re not using some sort of accounting software, you are in breach of the rules now.

The next deadline, which is currently April 2022, applies to VAT registered businesses with turnover of less than £85,000, again to submit VAT returns, so time is ticking.

Slightly less urgent, but worth starting to think about is the next proposed date of April 2023 applying to all businesses and landlords with annual turnover more than £10,000. This will then enable Income Tax to be reported through the chosen software. This will see the biggest change to our self-assessment system for decades, more than likely meaning income tax returns being submitted to HMRC every quarter rather than annually. I strongly suspect this will then lead to more regular payments of income tax (I say cynically).

Even further ahead there are noises to then use MTD to report Corporation tax, but this is currently on the horizon for 2026.

These dates are probably subject to change, but as I say, it’s coming, so if you need help, we support various bookkeeping platforms.