What is Making Tax Digital?
Making Tax Digital (MTD) is the UK government's programme requiring businesses, sole traders and landlords to keep digital records and send tax information to HM Revenue and Customs through compatible software. It has applied to all VAT-registered businesses since April 2022 and to income tax for many sole traders and landlords from April 2026.
Also calledMTDMTD for VATMTD for Income Tax
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- VAT
- All VAT-registered businesses
- Income tax
- Over £50,000 from April 2026
- Country
- United Kingdom
How Making Tax Digital works
MTD for VAT started in April 2019 for businesses above the VAT registration threshold and was extended to every VAT-registered business from April 2022. MTD for Income Tax applies to sole traders and landlords by their qualifying income from self-employment and property: over £50,000 from 6 April 2026, over £30,000 from 6 April 2027 and over £20,000 from 6 April 2028. They keep digital records, send quarterly updates through software and still file a tax return by 31 January after the tax year. Cloud ledgers such as Xero, QuickBooks and ANNA Money submit MTD VAT returns directly, and accountants file for clients through an agent services account.
Common questions
Who has to use Making Tax Digital?+
Every VAT-registered business, for VAT. For income tax, sole traders and landlords with qualifying income over £50,000 from April 2026, over £30,000 from April 2027 and over £20,000 from April 2028. Some people are exempt.
What software works with Making Tax Digital?+
Software that HM Revenue and Customs recognises as compatible for VAT or for income tax: most cloud accounting packages, bridging tools that link spreadsheets, and the agent software accountants use. Check that a product supports the specific MTD service needed.
What are quarterly updates under Making Tax Digital for Income Tax?+
Summaries of income and expenses from self-employment and property, sent through software every three months. They do not replace the annual return, which is still filed and paid by 31 January after the tax year ends.
Software used for Making Tax Digital
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