Making Tax Digital

Since 1st April 2022, all VAT registered businesses are required to follow the Making Tax Digital rules whereby they keep digital records and use software to submit their VAT return.

Making Tax Digital for Income Tax (MTD for ITSA)

From April 2024, this will affect any self-employed businesses and landlords with annual business and/or property incomes of over £10,000. 

It is never too early to prepare for Making Tax Digital. The software is already available, some businesses are already using it as part of a live pilot test. If you would like to find out more or start voluntarily using the software, take a look here. 

What is Making Tax Digital?

Making Tax Digital has been introduced by the government as part of it’s plans to make it easier for businesses and individuals to keep 

on top of their affairs and to get their tax correct. 

This will make tax more efficient and effective for taxpayers. 

Under MTD for ITSA, you must send quarterly updates to HMRC within one month of each quarter end. You must also send an end of period statement by 31 January following the end of the tax year (so by 31 January 2026 for 2024/25), and make a final declaration by the same date.

Preparing for Making Tax Digital 

There are a few steps you can take now which will help you to prepare for Making tax Digital. 

Know your deadline 

If you are a VAT registered business, your deadline was April 2022 which means your next VAT return needs to be using the MTD system. 

If you are self employed or a landlord with an income over £10,000, the deadline is 2024.  You can check the government website for more information about signing up. 

Find a software

To be compliant you must use a software which is compatible with MTD for VAT. Gov.uk have provided a list of software for you to choose from: https://www.tax.service.gov.uk/making-tax-digital-software 

A similar list for MTD for ITSA can be found here: https://www.gov.uk/guidance/find-software-thats-compatible-with-making-tax-digital-for-income-tax

Register for Making Tax Digital

You will not be enrolled automatically for MTD, you need to register on the government website using a Government Gateway ID. You can do that here https://www.gov.uk/government/collections/making-tax-digital-for-income-tax 

Contact Essendon if you need support with Making Tax Digital.