Making Tax Digital (MTD)
February 2025 Summary
Making Tax Digital is a UK government initiative which is being implemented in stages. MTD requires a business to keep digital records, send a quarterly summary of their business income and expenses to HMRC, and file a year-end declaration – all using MTD-compatible accounts software. This will replace the need for a Self Assessment Tax Return.
Whilst all VAT registered businesses have now had to implement MTD, interestingly many still choose to continue to use our Best VAT Business Accounts Book as well.
An important point to note is that at the time of writing (Feb 2025) there is no MTD compliance date yet for non-VAT registered businesses which are: General partnerships, limited companies (for Corporation Tax), and businesses with qualifying income (ie turnover) below £30,000.
Other non-VAT registered businesses will have to implement MTD as follows: If you are self-employed (ie a sole trader) and/or a landlord with qualifying income (also called “gross income” or “turnover”) of more than £50,000 in the 2024-25 tax year, then you will need to use MTD from 6 April 2026. If your figure is more than £30,000 in the 2025-26 tax year, then you will need to use MTD from 6 April 2027.