Making Tax Digital - MTD
Discover how Making Tax Digital (MTD) affects you and your business and learn how to get started with MTD compliant software with DVX Accounts.
Making Tax Digital (MTD) is a government scheme created to encourage businesses to manage their tax records online using dedicated software. It aims to simplify the process of record-keeping and payment and ease the burden of costly administrative errors.
At present, MTD applies only to VAT, however HMRC proposes to expand the scheme to include all business taxes - see below.
All VAT registered businesses with a taxable turnover above the current VAT threshold set out by HMRC must use MTD compatible software to manage their VAT records and send VAT Returns to HMRC. This applies to both limited companies and sole traders, and is mandatory for VAT Returns.
Making Tax Digital for Income Tax (MTD ITSA) is being introduced in phases from April 2026, sole traders and landlords with annual business and /or property income over £50,000 will come within the regime.
From April 2027 MTD ITSA will be extended to those with between £30,000 & £50,000 of such income.
Sole Traders & Landlords with annual business and/or property income over £20,000 will be required to use MTD ITSA by the end of this parliament.
If you think you will fall within Making Tax Digital ITSA from April 2026 (or 2027) you should consider whether your current record keeping systems are suitable. If your not yet recording all your transactions digitally you should do this as soon as possible.
DVX Accounts as HMRC Recognised software gives you cloud based services to help improve your record-keeping processes, so preparing early could help you make sure that the MTD changes are more than just an additional administrative cost.
Outsource IT - DVX as a Service
Let DV take the strain - Data Valley offer an outsourcing service to manage your accounts for you ensuring all administration is taking care of in an efficient & timely manner - Ensure your MTD tax return is filed on-time, every time. Enquire with DV to make the change early.
