Making Tax Digital (MTD) is at the heart of HMRC’s strategy to become one of the world’s most digitally advanced tax administrations. The plan, which was first announced in March 2015, is to simplify tax by replacing existing processes with digital record keeping and submitting tax returns digitally throughout the year.

Do Making Tax Digital (MTD) rules affect me?

You’ll need to be aware of the MTD rules if you:
• Are a VAT-registered business
• Submit a Self Assessment tax return as a self-employed business or landlord
• Pay Corporation Tax

To help businesses adjust to the changes, the new rules are launching in stages for different types of tax return.

Will I need special software for MTD?

You’ll need to keep digital accounting records and submit your tax information to HMRC using special software. You’ll be able to submit directly from your record-keeping software, or you’ll need to use bridging software to do so.

What are the benefits of Making Tax Digital?

MTD, according to the government, will make life easier for businesses and HMRC by increasing efficiency and making compliance easier. Other anticipated advantages include:

• The ability to access your personal digital tax account and review all of your tax information.
• Submitting your information to HMRC and paying your tax bill online is faster and easier.
• Increased reporting accuracy and fewer errors mean you’re more likely to pay only what you owe and are less likely to face compliance checks and audits.
• A more up-to-date picture of your finances and tax liabilities.