What is Making Tax Digital (MTD) For ITSA?

Background

Making Tax Digital (MTD) is revolutionising the way businesses report their financial information to HM Revenue and Customs (HMRC), and represents a further shift to digital recording keeping and online filing and reporting.

Digital record keeping and reporting is intended to make it easier for businesses to keep on top of their tax affairs and make tax submissions.

It also enables HMRC to check submissions more easily and is a step towards real time reporting.

The first stage of MTD has already been implemented for businesses submitting VAT returns. The government’s focus is now on Self-Assessment Income Tax Returns for most sole traders and landlords, and is expected to include 4.2 million tax payers.

This is the biggest change to self-assessment reporting to date and represents a big change in the way many businesses keep their records, and the frequency with which they submit information to HMRC.