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Legislation for Making Tax Digital

Links to the enacted and proposed legislation mandating Making Tax Digital.

MTD for VAT legislation

The primary legislation for MTD for VAT was enacted in section 62 of  Finance (No 2) Act 2017. The primary legislation is largely enabling with the detail delegated to secondary and tertiary legislation.

The secondary legislation for MTD for VAT (Value Added Tax (Amendment) Regulations 2018) was laid before parliament on 28 February 2018.

The tertiary legislation for MTD for VAT (VAT Notice 700/22: Making Tax Digital for VAT) was published on 13 July 2018 and completes the statutory framework for MTD for VAT.

MTD for income tax legislation

The primary legislation for MTD for income tax was enacted in section 60, section 61 and schedule 14 of  Finance (No 2) Act 2017. The primary legislation is largely enabling with the detail delegated to secondary and tertiary legislation.

Draft secondary legislation for MTD for income tax (The Income Tax (Digital Requirement) regulations and The Income and Corporation Taxes (Electronic Communications)(Amendment) Regulations) was published in September 2017.

Draft tertiary legislation for MTD for income tax (The Income Tax (Digital Requirements) notices) were published in September 2017.

The regulations will not be laid before parliament and the notice will not be published until the government makes a decision to mandate MTD for income tax. HMRC published (on 14 March 2018) a commissioners’ direction which allows those in the MTD for income tax pilot to use relevant software to deliver information equivalent to a personal return and self-assessment under sections 8 and 9, Taxes Management Act 1970. This direction provides the necessary certainty that completing the MTD for income tax end of year process satisfies the obligation to file a self assessment return.