What is MTD?

MTD stands for Making Tax Digital. This is an overarching term for a programme that is being run by the government to help make the tax process more efficient and more accurate.

At present there is MTD for VAT, and MTD for Income Tax (MTD for IT, MTD ITSA). MTD for VAT was introduced back in 2017 and is now fully functioning. This means that all VAT returns for clients with a turnover exceeding the VAT Threshold must use compliant software to submit their VAT Returns.

MTD for Income Tax is going to be mandatory from April 2026 for landlords and sole traders with income exceeding £50,000 per tax year. From April 2027 it will be for landlords and sole trader exceeding turnover £30,000. We have written a full guide on what to expect, and how to prepare which you can read here.