Making Tax Digital: What You Need to Know
Making Tax Digital is Expanding
Making Tax Digital (MTD) has been in place for VAT since 2019, but HMRC is now rolling it out to Income Tax Self Assessment. Here’s what you need to know.
Who’s Affected?
Initially, MTD for ITSA applies to self-employed individuals and landlords with gross income over £50,000. The threshold will drop to £30,000 in the following year.
What Changes?
Instead of filing one annual self-assessment return, you’ll need to submit quarterly updates to HMRC using compatible software. You’ll still file an End of Period Statement and a Final Declaration.
The Quarterly Schedule
- Update 1: 6 April – 5 July (due by 7 August)
- Update 2: 6 July – 5 October (due by 7 November)
- Update 3: 6 October – 5 January (due by 7 February)
- Update 4: 6 January – 5 April (due by 7 May)
Software Requirements
You’ll need HMRC-compatible software to keep digital records and submit updates. Spreadsheets alone won’t be sufficient — you’ll need bridging software at minimum.
How to Prepare
Start keeping digital records now if you haven’t already. Talk to us about which software suits your business, and we’ll handle the transition for you.
Our MTD Service
We offer a complete MTD compliance package: software setup, quarterly submissions, and year-end filing. Get in touch to learn more.