Making tax digital for income tax self-assessment (MTD ITSA) was set to take effect from 6 April 2024. This has been postponed until 6 April 2026.

The making tax digital (MTD) rules currently only apply for businesses that submit VAT returns. Those traders need to keep their VAT records in a digital format and transmit their VAT return data directly from their digital records to HMRC using MTD-compatible software.

For VAT periods starting on and after 1 April 2022 all VAT records must be recorded digitally and returns must be submitted under the Making Tax Digital (MTD) regime. If you are not already submitting your VAT returns using MTD-enabled software (or asking us to do so) you need to take action.

Filing VAT returns using making tax digital (MTD)-compatible software will be compulsory for all VAT registered traders for periods beginning on or after 1 April 2022 unless HMRC agrees that the taxpayer is exempt.

From 6 April 2023 all unincorporated businesses will have to keep their business records in a digital format and submit quarterly reports derived from those records to HMRC using MTD-compatible software. These are the basic obligations under making tax digital for income tax self assessment (MTD ITSA).