Does Making Tax Digital apply to partnerships?

Learn about Making Tax Digital for partnerships and how you can prepare your business for the legislation.

Does Making Tax Digital apply to partnerships?

Making Tax Digital (MTD) for partnerships was supposed to come into force in April 2025 but, following a government announcement in December 2022, this legislation has been delayed. You can read the full parliamentary statement here.

MTD has already come into place for VAT-registered businesses. Meanwhile, sole traders and landlords earning above £50,000 annually will need to follow MTD for Income Tax Self Assessment (ITSA) rules from April 2026. This means making the switch to HMRC-recognised software, keeping digital records, and submitting returns via software.

Are partnerships affected by MTD for ITSA?

Yes, they will be affected. However, HMRC has yet to confirm the date when partnerships will need to start following MTD rules.

For general partnerships, MTD for ITSA was supposed to come into place in 2025, but no date was given for limited liability partnerships or partnerships with a corporate or other ‘non-natural partner’.

When do partnerships need to sign up for MTD?

The MTD sign-up date for partnerships is yet to be confirmed.

Since announcing the delay to MTD for ITSA, HMRC has not specified a new date for MTD for partnerships. When the date is announced, HMRC will update their page on when to sign up for Making Tax Digital for Income Tax. We’ll also share updates with you here as they’re announced.

Why was MTD postponed for partnerships?

HMRC postponed MTD for partnerships, self-employed people, and landlords in December 2022.

According to HMRC, MTD for ITSA was delayed to ease the burden on businesses given the current economic climate. By pushing back the launch of MTD for ITSA, businesses have more time to familiarise themselves with the rules and get HMRC-recognised software in place.

The UK government introduced a phased mandation of MTD for ITSA instead – with self-employed people and landlords earning above £50,000 annually the first to join in April 2026.

To learn more about the revised timelines, read our guide – Making Tax Digital delay: everything you need to know. Additional changes to MTD for ITSA are outlined in our guide on what the 2023 Autumn Statement means for MTD.

How can partnerships prepare for MTD?

MTD for ITSA for partnerships might be a little way off, but preparing for the legislation now will mean an easier transition for you and your business.

Start experimenting with cloud-based software today. Digital record keeping and submitting income tax returns via software is an essential part of MTD, so learning how to record and manage transactions digitally will help you with compliance. Modern accounting software packages come with invoicing features that make getting paid easier too – a welcome boost for your cash flow.

HMRC-recognised software isn’t just useful for complying with MTD. Partnerships can speed up, automate, and streamline daily admin with the right software and app integrations – giving you more time to focus on growing your business.

It’s also a good time to research the legislation and get clear on your obligations. Read up on the rules for digital record keeping for MTD, and MTD penalties. Check out our Making Tax Digital jargon buster if you need more help navigating the legislation.

For more on MTD for ITSA legislation, head to our MTD for ITSA advice hub.

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