Making Tax Digital

Making Tax Digital is HMRC's initiative to digitize tax records and submissions, starting with VAT and expanding to other taxes. It requires businesses to use compatible software for tax reporting, aiming to reduce errors and streamline processes.

Experience

How Making Tax Digital Works

Making Tax Digital replaces paper-based tax records with digital systems. HMRC requires businesses to keep digital records and submit returns via compatible software, starting with VAT for most registered businesses.

The system uses real-time data checks to minimize errors. For example, if you're VAT-registered, you must use MTD-compatible software like Xero or QuickBooks to file returns, rather than the old HMRC portal.

10^th

Experience

10^th

Experience

Key Requirements and Deadlines

To comply with Making Tax Digital, there are specific steps you need to follow. Here are the essential requirements and timelines:

Register for MTD with HMRC if you're VAT-registered and have a taxable turnover above £85,000.
Use MTD-compatible software such as Xero, QuickBooks, or Sage for all tax record-keeping and submissions.
Keep digital records of all sales, purchases, and other transactions linked to your tax obligations.
Submit VAT returns quarterly or monthly directly through the software, with automatic data transfer to HMRC.
Ensure digital links between software components—no manual copying or pasting of data is allowed.
Deadline: MTD for VAT became mandatory for most businesses from April 2022.
Income Tax Self Assessment will join MTD from April 2026 for businesses with income over £50,000.
Corporation Tax will be included in future phases, with dates to be announced by HMRC.
Penalties apply for non-compliance, using a points-based system for late submissions or errors.
Maintain records digitally for at least six years, as HMRC may audit them.

10^th

Experience

10^th

Experience

Common Mistakes and Getting Professional Help

Many businesses face challenges with the digital shift. Common errors include using non-compatible software, failing to keep proper digital records, or missing submission deadlines, which can lead to penalties.

If your setup is complex or you're short on time, getting expert advice can save you stress and money. JD Accountancy offers direct, flexible support—available outside standard hours—to help you comply efficiently and focus on your business.

10^th

Experience

10^th

Experience

Let's Connect

Get In Touch With Us

The easiest way to reach us is by phone from 7am to 7pm on weekdays, or email and WhatsApp anytime. We offer flexible appointments outside standard hours, including weekends when needed.

Initial conversations are free and without obligation. We'll listen to your situation, answer your questions, and provide clear advice on how we can help reduce your admin stress. Most clients appreciate the direct access to our director for personalized support.

Get More Details

First Name *

Organization *

Phone

Email *

Enter your message

Captcha

Stay up to Date on Business & UK Finance

Worried you'll fall behind with what HMRC is up to? Never miss another change that affects your business again, by subscribing to our monthly newsletter.

JD Accountancy provides personal accounting and tax services for contractors and small businesses in Brynteg and across North Wales. Contact us for a free consultation and see how we can help reduce your admin stress.