Making Tax Digital is compulsory for VAT-registered businesses as soon as the VAT threshold is passed.
It is HMRC’s hope that one day the tax return as we know it will have been entirely abolished and all individuals and businesses will be required to submit their tax returns digitally.
Making Tax Digital for VAT has now been fully implemented and all VAT-registered business, whether voluntary or compulsory registered, should now be keeping digital records and filing their VAT returns directly from the software.
From April 2026 all sole traders and landlords with a turnover of £50,000 or more will be required to join Making Tax Digital for income tax. If an individual has income from both self-employment and rental sources the turnover from both must be aggregated to determine if the £50,000 threshold has been passed.
If you are a sole trader who’s not VAT registered or a landlord these changes are likely to represent major changes to the way in which you record keep and interact with HMRC.
If you’re a VAT-registered business, it’s important to start thinking about how Making Tax Digital will affect you.
Click below on one of our insights to learn more about MTD and how to prepare for the upcoming changes.