Making Tax Digital

Making Tax Digital (MTD) is a UK government initiative by HM Revenue & Customs (HMRC) designed to make the tax system more efficient, accurate, and easier for taxpayers.

Here’s a brief summary:

  • Purpose: To move tax record-keeping and reporting online, reducing errors and simplifying the process for individuals and businesses.

  • Who it applies to:

    • VAT-registered businesses must keep digital records and submit VAT returns using HMRC-approved software.

    • Income Tax Self Assessment (ITSA) and Corporation Tax are expected to join MTD in stages over the coming years.

  • How it works:

    • Businesses and individuals use compatible accounting software (like QuickBooks, Xero, or Sage) to record transactions digitally.

    • The software links directly to HMRC’s systems to submit tax returns.

  • Benefits:

    • Reduces paperwork and manual errors.

    • Provides more up-to-date financial information.

    • Makes compliance and record-keeping easier.

For Income Tax / Self Assessment (MTD for ITSA)

  • From 6 April 2026, self-employed individuals and landlords with annual income over £50,000 must start using MTD for Income Tax: keep digital records and file quarterly updates.

  • The deadlines for quarterly updates (standard periods) are:

    • 6 April to 5 July → due by 7 August

    • 6 July to 5 October → due by 7 November

    • 6 October to 5 January → due by 7 February

    • 6 January to 5 April → due by 7 May

  • The final declaration (replacing the annual Self Assessment return) will still be by 31 January following the end of the tax year.

At DXE we are committed to easing all our clients into the new initiative with a hassle free transition and an added focus on providing businesses with greater oversight rather than just compliance.

Select your income bracket from the options below to see when MTD will impact you.

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  • If your income was over £50,000 based on the 2024/25 tax year, you will need to start using MTD from April 2026.

  • Based on your income for the 2025/26 tax year, MTD will come into force for you from April 2027.

  • MTD will need to be adapted from April 2028 based on your income during the 2026/27 tax year.

  • Taxpayers with qualifying income of £20,000 or less are not currently required to join MTD for Income Tax.