Making Tax Digital (MTD) is a key part of the government's plans to make it easier for individuals and businesses to get their tax right and keep on top of their affairs.
Who does MTD affect?
Currently, MTD for VAT is mandatory for all VAT-registered businesses. MTD for Income Tax Self Assessment (ITSA) is set to be introduced for many sole traders and landlords in the coming years.
What are the requirements?
Under MTD, businesses must keep digital records and use MTD-compatible software to submit their tax returns to HMRC. Manual record-keeping and manual submissions via the HMRC portal are being phased out.