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Making Tax Digital

Making Tax Digital (MTD) is a fundamental change to the administration of the UK tax system. It will affect how businesses and other organisations, agents and individuals maintain their accounting and tax records and how they transact and communicate with HMRC. MTD transformation projects are being run by HMRC, but should be seen as just one element of the digitalisation of business.

In this section

Practical guidance

MTD for VAT penalties

The introduction of Making Tax Digital for VAT has prompted discussion about the risk of penalties where introducing new processes breach of the regulations.

Signing up to Making Tax Digital for VAT

Agents and businesses that have understood the MTD for VAT requirements and are ready to join the pilots have to follow an online process to sign up. HMRC has provided a step by step guide which we reproduce here.

Preparing your practice for MTD

Agents will need to take steps to prepare both their own practices and their clients for the disruption that Making Tax Digital and digitalisation will cause to the market for accounting and tax services.

MTD for business overview

HMRC's vision to digitalise the UK tax system is well underway. The transformation will start with Making Tax Digital (MTD) for VAT from April 2019.

MTD and VAT

The first stage of HMRC's Making Tax Digital (MTD) programme focuses on VAT and imposes new requirements for digital recording keeping on VAT registered businesses and organisations from April 2019.

Software for MTD

During the introduction of Making Tax Digital (MTD), ICAEW is sharing the latest information about the software that taxpayers and agents will need to keep digital records and to submit information to HMRC.

MTD for agents

Making Tax Digital (MTD) will lead to very significant change for many ICAEW members in practice. MTD is a major HMRC driven change to the administration of the tax system but it should be seen in the context of the increasing digitalisation of business, including the business of providing accounting and tax services.

MTD for individuals

MTD for individuals is centred around the Personal Tax Account (PTA) which already has many of the services needed by PAYE taxpayers. HMRC continues to improve and develop the PTA.

Webinars and videos

TAXtalk October 2018

This month the panel included Richard Wild, of the Chartered Institute of Taxation, and covered practitioner matters and the upcoming Budget.

Agent update

HMRC is on record as agreeing that agents need to be able to see and do everything that their clients can. But, as HMRC rolls out its digital tax systems, this worthy ambition has not yet been translated into reality.

Demystifying MTD The complete MTD for VAT rules

Join Anita Monteith and Sarah Ghaffari as they talk you through the legislation and how the requirements will affect businesses with taxable turnover above the VAT threshold and those that may cross the threshold for the first time.

TAXtalk April 2018

This month the panel discusses MTD for VAT regulations, MTD for income tax now it has moved into public beta, and new changes to UK based agents.

Tools for agents

Client MTD factsheet - non VAT registered businesses

A factsheet developed by ICAEW Tax Faculty to be shared by accountants to clients that are not VAT registered businesses and would like more information on Making Tax Digital.

Client MTD factsheet - VAT registered businesses

A factsheet developed by ICAEW Tax Faculty to be shared by accountants to clients that are VAT registered businesses and would like more information on Making Tax Digital.

Upcoming MTD events

Articles and features

ICAEW's global network

ICAEW provides support and resources for members overseas. Kirstin Gillon and David Lyford-Smith look at the key work of the IT Faculty abroad, including artificial intelligence, blockchain, cyber, data and fintech.

Representations

ICAEW Rep 115/18: Budget Autumn 2018

ICAEW's Tax Faculty has responded to HM Treasury's invitation for comments ahead of the 2018 Budget. The response concludes that there should be no new policy initiatives on tax at this time. Attention should instead be given to enabling taxpayers easily to fulfil their obligations and to understand their entitlements. Coping with HMRC’s digital systems has been made more difficult by the number of policy changes.

ICAEW Rep 65/18

ICAEW's Tax Faculty responds to the consultation: Cash and digital payments in the new economy: call for evidence published by HM Treasury on 13 March 2018.

ICAEW Rep 62/18

ICAEW's Tax Faculty responds to the VAT registration threshold call for evidence published by HM Treasury on 13 March 2018.

ICAEW Rep 18/18

MTD – Draft value added tax (amendment) regulations & notice 2018

Further support

Useful links

Some resources that we link to may pre-date the latest amendments to the relevant tax regulations. While these links contain useful information, please treat them with appropriate caution.

Software suppliers supporting Making Tax Digital for VAT

List of companies who are supplying suitable software to support the MTD for VAT pilot. These suppliers have tested their products in HMRC's test environment and have already demonstrated a prototype of their software to HMRC.

VAT Notice 700/22: Making Tax Digital for VAT

Notice giving updated guidance on digital record keeping and return requirements of MTD for VAT. It explains the digital records that businesses must keep, ways to record transactions digitally in certain special circumstances, and what counts as ‘functional compatible software’.

Making Tax Digital: changing the scope and pace - technical note

Technical note giving a revised statement of impacts for the Making Tax Digital for Business programme to reflect the changed scale and scope of the mandatory elements announced in the government's Written Ministerial Statement of 13 July 2017.

Machine learning and its impact on accounting

A summary of a panel discussion on machine learning, artificial intelligence and its impact on accounting. The article looks at predictions for 2018 and the implications for making tax digital (MTD).

Overview of Making Tax Digital

Policy paper explaining the foundations of MTD, the impact on individuals and businesses, links to consultations, the next steps for implementing MTD for business, and case studies.

Finance Bill: Written statement - HCWS47

Statement made by Mel Stride, Financial Secretary to the Treasury, announcing policy changes to the timeframe and scope of Making Tax Digital rules.

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