Getting Started with Making Tax Digital.

As a business owner or self-employed individual in the UK, you're likely juggling countless tasks while trying to stay compliant with ever-evolving tax rules. The shift to digital tax processes can feel overwhelming, but it's designed to simplify your life in the long run.

What is Making Tax Digital?

Making Tax Digital (MTD) is an HMRC initiative to modernise the UK's tax system. It requires businesses to keep digital records and submit tax information using compatible software, replacing traditional paper-based methods. Launched to reduce errors and improve efficiency, MTD applies to VAT, income tax, and eventually corporation tax.

For more details on specific taxes, see our sections on Making Tax Digital for VAT, Making Tax Digital for Income Tax (ITSA), and Making Tax Digital for Corporation Tax.

The Benefits of Making Tax Digital

Embracing MTD brings several advantages for your business:

  • Reduced errors in tax submissions, leading to fewer penalties.

  • Real-time visibility of your tax position, aiding better financial planning.

  • Time savings through automated processes, freeing you to focus on growth.

  • Easier compliance with HMRC, minimising audit risks.

STAT: Around 60% of businesses found their first MTD submission easy, rising to over 70% for ongoing ones.

For tailored benefits for audiences like self-employed or landlords, explore Specific Audiences for MTD.

The Requirements of Making Tax Digital

To comply with MTD, you'll need:

  • Digital record-keeping for all relevant transactions.

  • HMRC-approved software for submitting returns.

  • Quarterly updates for income tax self-assessment (ITSA) once applicable.

  • Secure Government Gateway account for access.

Exemptions exist for certain cases, detailed in later chapters like Making Tax Digital for VAT exemptions. Learn about approved options in Compliant Software for MTD.

The MTD Timeline

Making Tax Digital has rolled out in phases:

  • April 2019: Mandatory for VAT-registered businesses above £90,000 threshold.

  • April 2026: Starts for ITSA with income over £50,000.

  • April 2027: Extends to ITSA for income over £30,000.

  • Corporation tax: Expected post-2027, with consultations ongoing.

Stay updated via gov.uk. For deadlines by tax type, check Making Tax Digital for VAT, Making Tax Digital for Income Tax (ITSA), and Making Tax Digital for Corporation Tax.

Making Tax Do-able with PJL Accounts

PJL Accounts excels in supporting diverse audiences through MTD transitions, from self-employed to partnerships. Our clients share: "As a landlord, PJL made compliance straightforward." Count on our tailored expertise.

Guided Preparation Steps

✅ Step 1: Check if You’re Registered

  • New VAT registrations are auto-enrolled into MTD.

  • If you registered before April 2022 and haven’t switched, you need to act now.

✅ Step 2: Register for MTD for VAT (if needed)

  • Use your Government Gateway login

  • Sign up here: Sign Up with HMRC

  • Register at least 7 days before your next VAT Return is due

  • Wait for HMRC confirmation (usually within 72 hours)

✅ Step 3: Using an Agent?

  • We can register and manage MTD for you

  • You stay hands-off—we do the admin and handle compliance

If challenges arise, reach out to us for tailored assistance.

Remember we are here to enhance your work life balance. We have three ways to get you ready for ‘Making Tax Digital’.

Frequently Asked

  • xemptions apply for low-income or digitally excluded individuals; check HMRC guidelines at gov.uk.

  • Varies by provider, but many offer affordable plans starting from £X/month.

  • Only if bridged to compliant software; details in Compliant Software for MTD.

  • Fines start at £200 (point-based); avoid them by acting early – more in Challenges and Considerations in MTD.

  • No, it affects small businesses too; see Specific Audiences for MTD.

Your Next Steps with Making Tax Digital

By starting with MTD now, you'll enjoy streamlined taxes and peace of mind. Delay could lead to penalties, errors, and added stress. Contact PJL Accounts today for a free consultation to ensure your smooth transition.

Have questions or need tailored advice? At PJL Accounts, we’re here to help you navigate MTD compliance with ease. Contact us today or dive into our other guides to stay ahead!