Making Tax Digital was introduced by HMRC earlier this year, but new proposals will see further changes to this in the next few years.
What is MTD?
Making Tax Digital, or MTD, is an existing process from HMRC for those who do their own self-assessment tax returns. With this process, taxpayers upload expenses as they go and declare income quarterly. As it stands, payments are still made as either a lump sum, or ‘payment on account’ twice a year. However, the government is currently in consultation for a system where the payments are made more frequently and closer to the time income has been earned. This is expected to be monthly or quarterly. These newer changes will not come into effect till 2029.
Who Does it Apply to?
At the current time, this only applies to those with a qualifying income of over £50,000, and only to those who do their own personal self-assessment tax returns, such as sole traders and landlords. It also applies to accountants working on behalf of these people. Gloucester accountants such as https://www.randall-payne.co.uk/services/accountancy/gloucester-accountants can help set up and maintain tax records.
When Will it Start?
The reporting timeline for Making Tax Digital is already in place for eligible taxpayers and has been since April 2026. Changes to when the payments are due will take effect in April 2029.
If you earn over £50,000 you should have already started reporting under the new system, but make sure you are prepared for the changes to payment dates that may come into force from April 2029.
