Making Tax Digital FAQs
What is MTD?
What is a Digital Tax Account?
What is the timeline for MTD?
Quarterly reporting is now:
- Mandatory for VAT for all VAT-registered businesses with a turnover above the VAT registration threshold (£85,000)
- Optional for VAT-registered businesses with a turnover below the VAT registration threshold (£85,000). It will become mandatory from April 2022
From April 2023, quarterly reporting is:
- Mandatory for income tax for self-employed businesses and landlords with annual business or property income above £10,000
MTD for Corporation Tax is still under consultation, and HMRC will not mandate its usage before 2026.
What about ‘Digital Record Keeping’?
What about Monthly/Annual VAT returns?
The VAT annual accounting scheme will be retained with the current conditions. All of the above, if not exempt from MTD, will be required to keep digital records and submit their VAT returns through functional compatible software.
Periodic Updates (Voluntary)?
A voluntary update won’t discharge the VAT return obligation and won’t create a liability that must be paid or trigger a repayment.