MTD: Income Tax Pilot Tool

: Last Updated: 26 January 2022

Making Tax Digital (MTD) for Income Tax. Are you eligible to take part in the MTD Pilot?

Taxpayers and their agents can sign up and participate in a voluntary Making Tax Digital (MTD) for Income Tax pilot scheme.
Signing up to the Pilot will mean that you will allow your software to transmit your accounting data to HMRC every three months.
You can sign up now. This is entirely voluntary.
Only certain taxpayers are currently eligible to participate.

Are you eligible to take part?

MTD pilot: eligibility checker


Are you UK resident?	No →	You cannot join the MTD pilot as you do not fulfil the current criteria.
Yes ↓
Are you Registered for Self-Assessment?	No →
Yes ↓
Are your tax returns all up to date?	No →
Yes ↓
Are you either: A Sole Trader with income from one business only or A Property Landlord, or Both?	No →
Yes ↓
Have you claimed COVID-19 support funding under either: The Self Employed Income Support Scheme or Coronavirus Job Retention Scheme?	Yes →
No ↓
Does your business/both your businesses have a 5 April year-end?	No →
Yes ↓
Did your sole trader business (if you have one) Commence less than 2 years ago?	Yes →
No ↓
Did your property business (if you have one) Commence less than 1 year ago?	Yes →
No ↓
Do you have any of the following other types of taxable receipts: Employee or pension income Non-UK investment income capital gains Taxable state benefits?	Yes →
No ↓
Are you using, or going to start using functional compatible software that will allow you to report quarterly to HMRC?	No →
Yes↓
Is the taxable turnover from your business/businesses above £10,000?	No →	Your business may not be big enough to be mandated into MTD. MTD will apply to your first accounting period that starts on or after 6 April 2024, if the taxable turnover from your self-employed business or income from property is above £10,000. If you know that your income is less than £10,000, and is unlikely to exceed that level then MTD is voluntary for you. You can sign up to the Pilot if you wish to.
Yes↓
Congratulations! You have met the basic qualifying conditions to be able to join the MTD for Income Tax pilot. See the next tab.

MTD: At a glance

What does MTD for Income Tax mean?

Under Making Tax Digital for business (MTD), self-employed and property landlords are required to use software in order to report quarterly to HMRC and to also provide an annual update.

MTD will apply to the accounting period that starts on or after 6 April 2024 (delayed from April 2023) if taxable turnover from your self-employed business or income from property is above £10,000.

Taxpayers have a potential minimum of five interactions with HMRC per year.
This will apply from 6 April 2024.
Taxpayers are required to use functional compatible software: your accounting data will be used to access your business 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 (called a year-end declaration) at the year-end, which will include any claims and elections.

For full details MTD Toolkit for Accountants

What's new

Data show that in the three years since the pilot scheme began 1015 people have participated, of these, only 218 or approximately 21% are landlords with property income. The numbers have fallen dramatically since the first year, 2018-2019, from 877 to 26 in 2020-2021 and as of January 2022, only nine were participating.

HMRC's MTD Pilot

This is 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 tax bill as you go, if it makes it easier for you to manage your budget
Ask your accountant to send updates for you.

The Pilot is 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 at least 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.

Criteria

Use our tool, see tab MTD pilot: eligibility checker

You must be:

Resident in the UK.
Registered for Self Assessment.
Up to date with returns and payments.
Already within Self Assessment and submitting tax returns.

You cannot sign up if you:

Need to report income from other sources.
Have claimed one or more of the following grants:
- Self Employment Income Support Scheme.
- Coronavirus Job Retention Scheme.

Sign up to the Pilot

As of 9 December 2021, taxpayers can only sign up for the Pilot through their software provider.

Taxpayers wishing to join the Pilot should:

contact their software provider if they already have software or
select suitable software and liaise with their chosen provider.

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