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Making Tax Digital

Making Tax Digital (MTD) is a fundamental change to the administration of the UK tax system. It affects how businesses and other organisations, agents and individuals maintain their accounting and tax records and how they transact and communicate with HMRC. MTD has two key elements, MTD for VAT and MTD for income tax self assessment (ITSA).

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Need to know

MTD: Overview

ICAEW's Tax Faculty outlines the key things businesses and agents need to know about Making Tax Digital, as well as a timeline for its phased introduction.
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MTD: What you need to know

The key information on MTD for VAT and MTD for ITSA, covering the rules, how to comply and ensuring your practice is prepared.

Exclusive MTD for income tax
  • Helpsheets and support
  • 30 Sep 2021
Making Tax Digital (MTD) for income tax will be mandated from April 2024. Much of the detail of the requirements is still unknown. ICAEW's Tax Faculty outlines how it is likely to work and the progress of the pilot.
Exclusive MTD and VAT
  • Helpsheets and support
  • 27 Aug 2020
The first stage of HMRC's Making Tax Digital (MTD) programme focuses on VAT and imposes new requirements keeping on some VAT registered businesses and organisations from April 2019.
Exclusive MTD for VAT penalties
  • Helpsheets and support
  • 20 Aug 2020
The introduction of Making Tax Digital for VAT has prompted discussion about the risk of penalties where introducing new processes breach of the regulations.
Exclusive Software for MTD
  • Helpsheets and support
  • 22 Sep 2020
ICAEW shares the latest information about the Making Tax Digital (MTD) software that taxpayers and agents will need to keep digital records and to submit information to HMRC.
Exclusive Signing up for MTD
  • Helpsheets and support
  • 22 Oct 2021
ICAEW's Tax Faculty provides step-by-step guides on how to sign up for MTD VAT for businesses and for tax agents.
Exclusive Preparing your practice for MTD
  • Helpsheets and support
  • 06 Dec 2018
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.
Exclusive Engagement letters and privacy notices
  • Helpsheets and support
  • 07 Apr 2021
ICAEW has developed guidance for practice firms on what to include in engagement letters. This page provides a series of sample wordings to help you draft your own engagement letters.

Features and articles

 
Exclusive Finance software for smaller charities – the case for investment
  • Article
  • 12 Oct 2021
There has been significant interest in reviewing or replacing finance systems amongst charities recently. The introduction of HMRC’s ‘Making Tax Digital’ (MTD) has prompted many organisations to review their systems. It is also possible that many finance system reviews had been put on hold during lockdown. This article examines some of the key factors that any charity should consider when reviewing their finance system.
Exclusive HMRC answers your MTD questions
  • Article
  • 12 Oct 2021
HMRC answers your MTD questions on deferrals, future plans and much more.
ICAEW technical round-up: September 2021
  • Article
  • 28 Sep 2021
This month’s top technical stories feature news on the MTD for ITSA deferment, COVID support schemes coming to an end and IR35 compliance checks for the finance and energy sectors.
MTD ITSA deferment provides more time to prepare, says FST
  • Article
  • 28 Sep 2021
The new Financial Secretary to the Treasury has confirmed that the decision to postpone the introduction of Making Tax Digital for income tax was made in recognition of the time needed for taxpayers, agents and HMRC to prepare for changes.
MTD ITSA and basis period reform postponed
  • Article
  • 23 Sep 2021
Government and HMRC have listened to representations and put back the implementation of MTD ITSA and potential reforms to basis periods. The new MTD ITSA start date of April 2024 for the self-employed and landlords has now been set in legislation, providing the certainty that has been lacking, says ICAEW.
Online VAT return is closing to 800 traders
  • Article
  • 21 Sep 2021
HMRC is trialling a forced closure of the online VAT return for 800 businesses that should be complying with Making Tax Digital for VAT. ICAEW warns that these businesses will not be able to file VAT returns due on 7 October 2021 unless they have signed up to MTD VAT.
Tax news in brief
  • Article
  • 08 Sep 2021
Highlights from the broader tax news week ending 8 September, which includes: date confirmed for Autumn Budget; Scottish Government consults on tax policy; Eclipse Film Partnership members given six months to settle; FTT needs more resource to tackle delays; MTD regulations laid before parliament; new member for OECD BEPS framework and CTF reminder for teenagers.
Basis period reform – feedback needed
  • Article
  • 09 Aug 2021
The implications of the proposed reform to basis period rules, in particular the interaction with MTD for income tax self assessment, are emerging. ICAEW’s Tax Faculty is seeking the views of members before the 31 August closing date for the consultation.

Webinar: MTD ITSA - back to basics

In this webinar, the Tax Faculty explains the regulations in detail and explain where we are with the development of the policy and the pilot, and what taxpayers and agents can do to prepare. 

  • Free
  • 30 November 2021
  • 11:00
Register to attend
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Recordings

Webinars, videos and podcasts from ICAEW on the MTD regime.

MTD for ITSA - back to basics and myth busting
  • Webinar
  • 30 Nov 2021
This webinar from the Tax Faculty will cover the regulations in detail and explain where we are with the development of the policy and the pilot and what taxpayers and agents can do to prepare.
Exclusive MTD Phase 2 - Are you ready?
  • Webinar
  • 25 Aug 2021
In this February 2021 webinar we recap the MTD journey so far, outline HMRC's roadmap and timescales, and provide an overview of the legislation and what this means for your practice. In association with Sage and HMRC.
MTD Phase 2 - Are you ready?
  • Webinar
  • 11 Feb 2021
Everything you need to know to get ready for the MTD Phase 2 deadline, including what counts as a digital link.
MTD for Income Tax Self Assessment
  • Webinar
  • 11 Feb 2021
HMRC is expecting to lay the Making Tax Digital for Income Tax Self Assessment Regulations before Parliament in February 2021. This will give effect to the April 2023 start date for MTD for ITSA, as well as confirming many of the requirements (some of the detail will be in tertiary legislation which will follow later).
MTD for Corporation Tax
  • Webinar
  • 13 Jan 2021
On 12 November 2020, HMRC published the long-awaited consultation on Making Tax Digital for corporation tax (CT), confirming it's plans to extend MTD to companies. In this webinar ICAEW Tax Faculty explain HMRC's plans to roll out MTD for CT.
Demystifying MTD: Signing up to MTD for VAT for business
  • Webinar
  • 10 Apr 2019
This webinar provides a detailed step by step guide for businesses on implementing MTD for VAT.
Demystifying MTD: Signing up for MTD for VAT for agents
  • Webinar
  • 10 Apr 2019
This webinar provides a step by step guide for agents on implementing MTD for VAT/
Making Tax Digital for Charities | 29 March 2019
  • Webinar
  • 29 Mar 2019
The webinar covers the background to MTD, what the VAT filing requirements will be and what actions charities may have to take and what is meant by the ‘soft landing’ period. It will also include a demonstration of the Buzzacott bridging software showing how a digital submission can be made using the software.

Bloomsbury Core Accounting and Tax Service

Eligible firms have free access to Bloomsbury Professional's comprehensive online library, comprising more than 60 titles from some of the country's leading tax and accounting subject matter experts. Find out who is eligible and how you can access the Core Accounting and Tax Service.

Exclusive Guide to taxpayers’ rights and HMRC powers
  • eBook
  • 2021
  • Robert Maas
Guide to the growing breadth of HMRC powers and the increasingly complex penalty regime for non-compliance.
Exclusive Tax returns
  • eBook chapter
  • 2021
  • Robert Maas
A chapter on taxpayers' rights and HMRC powers in relation to tax returns.
Exclusive Making tax digital tracker
  • eBook
  • 2021
  • Rebecca Cave, Jason Piper
The Tracker provides plain English guidance on the operation of MTD, with sections covering VAT, income tax, corporation tax and tax agents in relation to MTD. 
Terms of use

You are permitted to access, download, copy, or print out content from eBooks for your own research or study only, subject to the Acceptable usage terms.

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.

Case studies for Making Tax Digital
  • Website
  • 19 Oct 2020
  • HMRC
A series of short case studies from businesses in a range of industry sectors on how Making Tax Digital has worked for them.
Software suppliers supporting Making Tax Digital for VAT
  • Website
  • 25 Jul 2018
  • HMRC
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
  • Website
  • 13 Jul 2018
  • HMRC
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
  • Website
  • 01 Dec 2017
  • HMRC
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
  • Website
  • 16 Nov 2017
  • AccountingWeb
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).
Finance Bill: Written statement - HCWS47
  • Website
  • 13 Jul 2017
  • UK Parliament
Statement made by Mel Stride, Financial Secretary to the Treasury, announcing policy changes to the timeframe and scope of Making Tax Digital rules.
Overview of Making Tax Digital
  • Website
  • 13 Jul 2017
  • HMRC
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.

Further support

Exclusive ICAEW Tax and VAT Helpline
ICAEW tax and VAT helpline is a subscription based service provided by Markel Tax (formerly Abbey Tax). It offers expert, practical advice on UK tax and VAT issues and trends.
Tax Faculty Find out more about the Tax Faculty and upcoming events. Faculty members can access exclusive content, including TAXline, TAXguides, webinars, representations and support schemes.
Exclusive TAXconnect Search for a consultant to help you with a specific technical tax problem. TAXconnect works on a telephone ‘hotline’ system, whereby consultants offer advice to fellow Tax Faculty members and Faculties Online subscribers on tax problems for a nominal fee.
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