Making Tax digital (MTD)

For the first time in 2015, Government announced its intention to abolish the self-assessment tax return. Since then, HMRC is working on “Making Tax digital” programme to be phased in over several years. Making Tax Digital for VAT was the very first element of this making tax digital program that was rolled out in April 2019.

Using compatible software is a requirement to comply with Making Tax Digital (MTD) requirement. We have simplified everything you need to know about Making Tax Digital below:

Making Tax Digital (MTD) is a government’s initiative to modernise the UK tax filing system. The objective is to make it easier for individuals and businesses to manage their tax right by reducing errors through digital record keeping and more efficient reporting.

Under MTD, all VAT-registered businesses and certain taxpayers are required to maintain digital records and submit their returns using HMRC-approved software.

All VAT registered businesses must comply with MTD from April 2022. That includes sole traders, limited companies, partnerships, charitable trusts, and landlords with at least one UK property.

Originally, businesses had to manually sign up for MTD for VAT. Now, HMRC is automatically signing VAT registered businesses up to MTD. As long as you register for VAT, you won’t need to sign up for MTD for VAT separately. If your business isn’t VAT registered, you don’t need to comply with MTD yet, but you may need to sign up for making tax digital for self-employed.

VAT-Registered Businesses: All businesses with gross earnings above the VAT registration threshold of currently £85,000 must submit VAT returns digitally using a compatible software.

Smaller Businesses: Small businesses registered for VAT must also comply with MTD. However, small businesses not registered for vat are currently exempt from MTD for VAT

Self-Employed & Landlords: Income Tax reporting will eventually be brought under MTD rules, so early preparation is crucial. You need to follow the requirements for Making Tax Digital for Income Tax if you are self-employed or a landlord from:

  • 6 April 2026 if you have an annual business or property income of more than £50,000
  • April 2027 if you have an annual business or property income of more than £30,000

How We Can Help

At Windfall Accounting LLP, we provide you tailored MTD services to ensure your business stays compliant without the stress of navigating through complex software or regulations. Our MTD services include:

Digital Recordkeeping Setup

We’ll assess and set up the right HMRC-compliant software for your business.

VAT Return Submissions

We’ll process timely and accurate MTD submissions that meet relevant standards.

Training & Support

We’ll train your team on how to use MTD-compatible software effectively.

Ongoing Compliance Monitoring

We’ll regularly check in to ensure your processes stay compliant with MTD changes.

Benefits of MTD for Your Business

Reduced Errors

Digital recordkeeping minimises common mistakes in vat return submissions.

Efficient Processes

Submitting returns becomes quicker and more streamlined.

Improved Financial Visibility

Real-time insights into your vat data.

Avoid Penalties

Ensuring compliance with MTD regulations helps you avoid unnecessary penalties.

Why Choose Windfall Accounting LLP for MTD?

We combine expert knowledge with the latest technology to ensure your tax affairs are always accurate and up to date. Whether you’re a small business or a large corporation, we customize our solutions to fit your specific needs. Get in touch with us today to make the switch to digital tax reporting easy and stress-free!