Making Tax Digital for VAT timeline
The first phase of Making Tax Digital for VAT began in 2019. VAT-registered businesses with a taxable turnover above the VAT threshold (£85,000) were mandated to keep digital records and submit returns using compatible software.
MTD for Income Tax Self Assessment (ITSA)
From April 2026, Making Tax Digital for ITSA will apply to sole traders and landlords with a total business and/or property income above £50,000 per year.
Sole traders and landlords earning above £30,000 will follow in 2027. Those earning below £30,000 are yet to be mandated.
Keep clients informed about Making Tax Digital
As Making Tax Digital for accountants and bookkeepers is changing, it’s a good idea to keep your clients in the know about what will be required of them. If they join Making Tax Digital for VAT or Income Tax they must keep digital business records and:
- for VAT, submit their returns to HMRC using MTD-compatible software
- for Income Tax, provide summary updates of income and expenses to HMRC every quarter and finalise their tax using MTD-compatible software
Xero and the benefits of Making Tax Digital for accountants
For accountants and bookkeepers, online accounting has many benefits. It can save time, improve accuracy and encourage collaboration with clients, ultimately giving your clients transparency and more control over their finances.
Xero is HMRC-recognised and can be used to calculate VAT and file VAT returns online securely. Find out more about submitting VAT returns easily with Xero.
Signing up your clients for Making Tax Digital for VAT
Signing up your clients is easy. You’ll need an agent services account. You may already have an account if you’ve previously signed up for the Trust Registration Service or signed clients up for Making Tax Digital for VAT. If so, you won’t need to create a new one.
MTD resources for accountants and bookkeepers
Explore our accounting and bookkeeper guides, articles, and webinars covering everything you need to know about Making Tax Digital for VAT, including how to support your clients with the shift to MTD.