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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

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.

MTD and income tax

Making Tax Digital (MTD) for income tax will not be mandated until April 2020 at the earliest and much of the detail of the requirements is still unknown. Here ICAEW's Tax Faculty outlines how it is likely to work and the progress of the pilots.

Agent Services Account

As HMRC rolls out new digital services to agents, including MTD for VAT and income tax services, access will be via a new agent services account (ASA).

Webinars and videos

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.

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

28 Sept - Tax Faculty Conference 2018

Our popular one-day conference will look at the challenges facing tax practices today and tomorrow with a line-up of expert speakers including Rebecca Benneyworth, Peter Rayney, John Cassidy and ICAEW President Paul Aplin. This year’s topics include Making Tax Digital, HMRC enquiries, off-payroll working and a session dedicated to practical points aimed at general practitioners.

15 October - MTD Live: Navigating Making Tax Digital

ICAEW’s MTD Live Expo will bring to life the array of software options on offer, from accounting packages, spreadsheet solutions and the benefits of bank feeds. Tax and IT Faculty experts will be on hand to take you through the essentials of MTD, discussing the key steps you need to take to get your practice and clients ready. The even includes an opportunity to put questions to our expert speakers.

Articles and features

Start your Digital Journey - ahead of MTD

With the prospect of Making Tax Digital impending, and increasing pressure on practices to move from compliance to business advisory, there is an urgent need for guidance to help practitioners make the transition seamlessly.

ICAEW reveals many firms unaware of MTD for VAT

ICAEW has surveyed 500 business, asking if they are aware of the new requirements under HMRC's Making Tax Digital (MTD) programme and what steps they have take to prepare for the changes. Close to half of respondents said they had not heard of MTD for VAT. Read the full survey results.

The latest updates on Making Tax Digital

Keeping up with Making Tax Digital can be difficult, especially when that includes Making Tax Digital for individuals and for business. Caroline Miskin of the ICAEW Tax Faculty guides members on the latest updates and what you should do to prepare.

Representations

ICAEW REP 128/17

Making tax digital for VAT - legislation overview

ICAEW REP 126/17

Making Tax Digital for income tax: Secondary and tertiary legislation.

ICAEW REP 117/17

Tax Policy: Autumn budget, making tax digital, finance bill and longer term recommendations for a better tax system

ICAEW REP 116/17

Budget Autumn 2017 - to submit representations as part of the policy-making process

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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