Originally introduced by legislation in 2017, MTD is the UK government / HMRC’s plans to digitalise the tax system.
On the positive side this means there is far less manual paperwork, making it easier for everyone to stay on top of things. It does mean there is less "wiggle room" in the way things are reported, and, collectively, businesses and accountants need to be right on top of the timeliness and accuracy of the information captured and reported to the HMRC.
Luckily, Xero are all over this.
Xero has been "born in the cloud" and have made it easy to immediately lodge your VAT returns, right within Xero. As an accounting firm that were originally born in Australia , and is exclusively working with Xero as a Gold Partner, we've been part of this digital, cloud based way of working for years now #notyourregularaccountant ;)
Making Tax Digital for Self Assessment
MTD for ITSA was due to start in 2024 but was delayed to 2026. Under MTD for ITSA, sole trade businesses and landlords will need to keep and maintain digital records and use MTD compatible software to manage, track and send updates to HMRC. Sole traders and landlords earning above £50,000 will need to comply with MTD for ITSA rules from April 2026. Sole traders and landords earning above £30,000 will follow in April 2027
We'll continue to work with our clients as Xero are already trialling Self Assessment