Making Tax Digital (MTD)
HMRC's programme requiring businesses to keep digital records and submit tax information through compatible software, beginning with VAT and extending to income tax.
Making Tax Digital (MTD) is HMRC's programme requiring businesses to keep digital records and submit tax information through compatible software. It began with VAT and is extending in phases to income tax self assessment, with the aim of reducing errors and closing the tax gap.
For finance teams, MTD makes digital, structured record-keeping a legal requirement rather than a matter of preference. Paper ledgers and manual rekeying give way to software that maintains a digital trail from transaction to submission.
It sits alongside the broader UK direction towards structured, machine-readable financial data, of which mandatory e-invoicing is the next significant step.
Making Tax Digital is an HMRC programme. Scope and timelines are set by HMRC and roll out in phases across VAT and income tax self assessment.