Making Tax Digital (MTD) is HMRC's initiative to digitalise the tax system. Businesses must keep digital records and submit returns using compatible software.
What is Making Tax Digital?
MTD requires businesses to maintain digital records and file returns electronically using HMRC-approved software. The aim is to reduce errors and make tax administration more efficient.
Who Needs to Comply?
MTD requirements depend on your business type and turnover. Check if you're affected at the official Making Tax Digital page.
Current implementations include:
- MTD for VAT: VAT-registered businesses above the threshold
- MTD for Income Tax: Self-employed and landlords above income thresholds
See HMRC's MTD for VAT guidance and MTD for Income Tax guidance for current thresholds and deadlines.
Getting MTD Ready
1. Choose Compatible Software
Select HMRC-recognised software. Find approved providers on the HMRC compatible software list.
2. Digitise Your Records
All financial records must be kept digitally, including sales, purchases, and expenses.
3. Establish Digital Links
Ensure software products are digitally linked. Manual data transfer doesn't meet MTD requirements.
Benefits of MTD
- Reduced errors through digital record-keeping
- Real-time visibility of finances
- Time savings through automation
- Improved accuracy
How We Can Help
Optima Accountancy supports businesses with MTD compliance:
- Software recommendations and setup
- System configuration
- Staff training
- Ongoing compliance support
Contact us to ensure your business is MTD-ready.