Taxpayers and their agents can sign up and participate in a voluntary Making Tax Digital (MTD) for Business, Income Tax pilot scheme. This will allow your software to transmit your accounting data to HMRC every three months.

You can sign up now. This is entirely voluntary.

What does MTD mean?

The idea is that you will file five tax returns per year instead of one.

  • Your accounting data will be used to access your income.
  • You will not need to provide further information unless, of course, you need to try and correct errors.
  • There will be a final tax return at the year-end.

This is very much a test pilot and it may well be that aspects of the service will change. 

You must use commercial software: HMRC will not provide any free software.

You can also choose to:

  • Send an update to HMRC more often.
  • Pay your bill as you go, if it makes it easier for you to manage your budget
  • Ask your accountant to send updates for you.

Not recommended for

  • Taxpayers with a poor understanding of IT.
  • Taxpayers with a poor understanding of bookkeeping.
  • Those who do not have a reliable broadband connection.
  • Those who will not be available on a quarterly basis to send in data.
  • VAT registered traders.
  • Traders and landlords with a low income.

Ask your adviser if you decide to take part in this pilot and wish to delegate to them.

You must be:

  • Resident in the UK.
  • Registered for Self Assessment.
  • Your returns and payments must be up to date.
  • You cannot sign up if you have never submitted a tax return before.

External links

HMRC: Sign up your client for Making Tax Digital for Income Tax

HMRC: Find software that's compatible

 

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