MTD for business overview
HMRC's vision to digitalise the UK tax system is well underway. The transformation started with Making Tax Digital (MTD) for VAT from April 2019.
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.
Need to know
In this section
Practical guidance
Making tax digital for VAT: Systems software and schemes
Technical helpsheet to help members in practice with implementing Making Tax Digital for VAT. It focuses on the systems, software and schemes practitioners will need in order to file clients' MTD for VAT returns digitally.
Making tax digital for VAT - A starting point for members in practice
Technical helpsheet to help members in practice with implementing Making Tax Digital for VAT. It gives a breakdown of the key dates and next steps on keeping digital records, setting up an HMRC Agent Services Account, preparing clients for MTD, and using MTD compliant software.
Engagement letters and privacy notices
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.
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 - step by step for agents
Agents who will be providing MTD for VAT services to clients need to follow the preliminary steps of understanding the MTD for VAT requirements, agreeing responsibilities with clients and choosing MTD for VAT software.
Signing up for Making Tax Digital for VAT – step by step for businesses
Businesses that will be filing their own MTD for VAT returns need to follow the preliminary steps of understanding the MTD for VAT requirements, agreeing responsibilities with any third party bookkeeper or agent and choosing MTD for VAT software.
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 started with Making Tax Digital (MTD) for VAT from April 2019.
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.
Client MTD factsheet - voluntarily VAT registered businesses
A factsheet developed by ICAEW Tax Faculty to be shared by accountants to clients that are voluntarily VAT registered businesses and would like more information on Making Tax Digital.
Webinars and videos
Business tax update
The latest key tax rules and reliefs affecting business.
Demystifying MTD: Signing up to MTD for VAT for business
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
This webinar provides a step by step guide for agents on implementing MTD for VAT/
TAXbite: MTD - who does it apply to and when does it start?
This TAXbite explains which businesses are in scope for MTD for VAT and when they must comply with the rules.
Articles and features
How has Making Tax Digital changed VAT recordkeeping?
Caroline Miskin explains Making Tax Digital for VAT’s recordkeeping requirements. She answers some common questions and clarifies areas of confusion, including the level of detail needed for digital records, relaxations and trading through digital platforms.
The big data benefits of Making Tax Digital
As businesses migrate their reporting online, Johnston Carmichael’s Ewan Bolt takes a look at the additional advantages of going digital.
Avoiding Making Tax Digital for VAT penalties
The Tax Faculty’s Caroline Miskin provides advice on avoiding Making Tax Digital for VAT penalties, including what to do if things go wrong and HMRC’s so-called light touch approach. Her key advice is: whatever issues you may have with filing a VAT return, pay the VAT by the due date.
How to set up your agent services accounts
Caroline Miskin of the Tax Faculty reports on an event at Chartered Accountants’ Hall, London, which featured ICAEW and HMRC and focused on supporting agents in setting up their agent services account.
Representations
ICAEW Rep 137/18
ICAEW responds to the business lifecycle review call for evidence published by the Office of Tax Simplification in October 2018.
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 94/18
Off-payroll working in the private sector.
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.
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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