Ultimate Guide to Making Tax Digital – MTD

Making Tax Digital – MTD

Ultimate Guide to Making Tax Digital (MTD) – Everything You Need to Know

This dashboard aims to guide sole traders, small & large business owners through the transition from general tax reporting to Making Tax Digital (MTD).

Our Ultimate Guide to Making Tax Digital (MTD) serves as an educational hub, onboarding guide, and referral gateway, presented through an easy-to-follow format with supporting content.

Check out the Making Tax Digital Timeline, then browse through the different topics related to:

  • How to register for MTD
  • MTD for VAT
  • MTD for Income Tax
  • MTD for self-employed
  • MTD for business
  • MTD for landlords
  • MTD exemptions
  • Best MTD software
  • Best MTD bridging software
  • MTD digital links
  • MTD jargon
making tax digital timeline illustration with a monitor showing tax submitted

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Making Tax Digital Timeline

making tax digital timeline ultimate guide from launch to april 2028

Frequently Asked Questions About Making Tax Digital

What is Making Tax Digital (MTD)?

Making Tax Digital is an HMRC initiative that requires taxpayers to keep digital records and submit their tax returns using compatible software.

Who does MTD apply to?

MTD for VAT applies to all VAT‑registered businesses, while MTD for Income Tax (ITSA) will apply in phases: from April 2026 for those earning over £50,000; from April 2027 for those above £30,000; and from April 2028 for those earning over £20,000.

Do I still need to file returns through the HMRC website?

No. Under MTD, you must submit your returns via HMRC‑approved accounting or bridging software rather than using the HMRC portal.

What software do I need?

You need MTD-compatible software such as accounting platforms like Xero, QuickBooks, or Sage, or bridging software if you prefer spreadsheets.

Can I still use spreadsheets?

Yes, you can still use spreadsheets, but only if they are connected to HMRC via bridging software to ensure compliance.

What are the deadlines for MTD?

MTD for VAT is already mandatory. For ITSA, the roll‑out schedule is: April 2026 (£50k+), April 2027 (£30k+), and April 2028 (£20k+).

What happens if I don’t comply?

Failing to comply with MTD requirements may result in HMRC applying penalties under its new points-based system. Each missed deadline adds a penalty point. Once a threshold is reached, a financial penalty will be charged, and HMRC may also apply interest on any late payments.

Will MTD change how often I file returns?

Yes. VAT returns remain quarterly, while ITSA introduces quarterly updates with a final annual declaration instead of the traditional Self-Assessment.

How do I sign up for MTD?

You must register via the HMRC website and authorise your chosen MTD-compatible software to connect and submit on your behalf.

What are the benefits of MTD?

MTD helps reduce errors, streamlines record-keeping, strengthens real-time visibility of tax liabilities, and makes the tax process more efficient overall.

Our Making Tax Digital Guides

Quick links for Making Tax Digital

Looking for the essentials on Making Tax Digital?

This section pulls together key links from HMRC to help you get things done.

Whether you need to sign up for MTD, check if your business qualifies, or find compatible software, it’s all here in one place.

Get direct access to what matters.

Keep this list handy as deadlines approach or if you need to double-check any requirements.

  • Overview of Making Tax Digital
  • Sign up for MTD for Income Tax (ITSA)
  • Check if you’re eligible for MTD for ITSA
  • MTD for ITSA: What you need to do
  • Find compatible software for MTD VAT
  • Find compatible software for MTD ITSA
  • MTD agent services for accountants and bookkeepers
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