Making Tax Digital (MTD)

Making Tax Digital What Is MTD

What is Making Tax Digital

Making Tax Digital, or MTD for short, is the name given to the government initiative that seeks to modernise and improve the processing of returns for all taxes, meaning more accurate and timely information available to HMRC and better liability predictions available for tax payers. Making Tax Digital simply means keeping your accounting records digitally, on the computer, in a way that is designed to be able to submit your records to HMRC in the way that they will require with MTD. The government plans mean that in time, all taxes will be required to have the returns submitted directly from your digital records. 

With Making Tax Digital in mind, we appreciate the differing challenges that are faced in bringing records into the Digital Era; we aim to help you to better understand the meaning of Making Tax Digital, what it means for you personally as well as a series of bite sized guidance demos to help you use your MTD software

Guidance for your chosen MTD Software

How To Use Quickbooks Online

Full series of bite sized videos is available to help you use Quickbooks software

How To Use Sage Business Cloud

How to Use Freeagent

Understanding the Jargon in Freeagent

How To Use Xero

Making Tax Digital Timeline

Making Tax Digital for VAT

VAT-registered businesses with a taxable turnover above the VAT threshold (£85,000) are now required to follow the Making Tax Digital rules by keeping digital records and using software to submit their VAT returns.

If you are below the VAT threshold you can voluntarily join the Making Tax Digital service now.

VAT-registered businesses with a taxable turnover below £85,000 will be required to follow Making Tax digital rules for their first return starting on or after April 2022.

Making Tax Digital for Income Tax

Self-employed businesses and landlords with annual business or property income above £50,000 will need to follow the rules for MTD for Income Tax from their next accounting period starting on or after 6 April 2026. Those with income between £30,000 and £50,000 needing to start from April 2027

Some businesses and agents are already keeping digital records and providing updates to HMRC as part of a live pilot to test and develop the Making Tax Digital service for Income Tax. If you are a self-employed business or landlord you can voluntarily use software to keep business records digitally and send Income Tax updates to HMRC instead of filing a Self Assessment tax return.

Making Tax Digital for Corporation Tax

The government published a consultation on the future of Making Tax Digital for Corporation Tax from 12th November 2020 to 5th March 2021

The government will provide businesses with an opportunity to take part in a pilot for Making Tax Digital for Corporation Tax and will not mandate its usage before 2026.

As well as your MTD software, there are further tools that can help you on your Digital Journey!

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AutoEntry reads information from scanned or photographed invoices, receipts, expenses, statements, and more. Simply take a photograph on your phone and all of the information will be entered automatically into your accounting software, or you can download the data into a spreadsheet.

Click to take advantage of a free trial of the software as well as free training so you can see just how much time and money AutoEntry can save you. Just click on the link below to sign up for the free trial. Should you later decide to subscribe, you can then receive discount of 50% for your first six months. 

Starling Bank is a Digital Bank, supporting businesses as they move into the Digital Era click below for more information

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Private Landlords

Landlords with property income above £10,000 will need to follow the rules for MTD for Income Tax from 6 April 2024

National Residential Landlords Association provide lots of information for Landlords and membership is great value

Annual membership is £75, to receive a £15 discount from your first year’s membership fee you can use our discount code DSG-228