Everything you need to know about Making Tax Digital

Making Tax Digital (MTD) has moved from plans to a live, expanding programme.

Some parts are already mandatory, other parts are being phased in and HMRC has reshaped its longer-term priorities for digital tax.

The main focus of MTD has become apparent and the ways to keep pace with the changes are now clear.

Anyone affected by MTD should keep good digital records, use compatible software and plan for more frequent reporting and tighter penalties.

Speak to our team today for expert support and guidance with MTD preparations.

The current headline rules you need to know

MTD for VAT is live and expected of virtually all VAT-registered businesses. Keep digital VAT records and submit VAT returns using MTD compatible software.

In April 2026, any self-employed individual, sole trader, or landlord earning more than £50,000 in total annual income will need to comply with MTD for Income Tax. That threshold falls to £30,000 in April 2027 and to £20,000 in April 2028.

HMRC has said it does not intend to introduce Making Tax Digital for Corporation Tax (CT). Instead, HMRC will modernise and improve CT systems in other ways as set out in its Transformation Roadmap. That reduces the immediate prospect of a mandatory MTD CT regime, but it increases the emphasis on digital readiness across other taxes.

Penalties and interest are getting tougher for late returns and late payments under digital regimes. Recent government announcements and HMRC reforms mean penalty exposure will increase, making timely digital workflows far more important.