Making Tax Digital

Making Tax Digital (MTD) is a UK government initiative that sets out a vision for the ‘end of the tax return’ and a ‘transformed tax system’ by 2020. HM Revenue and Customs (HMRC) states that the main goal of MTD is to make tax administration more effective, more efficient and simpler for taxpayers.

HMRC is implementing the initiative and is working closely with accounting software developers to ensure that taxpayers are able to make the switch to digital tax. The outlined changes apply to a wide range of taxpayers, including most businesses, micro-businesses, self-employed people and landlords, as well as individual taxpayers.

Under MTD, taxpayers will send HMRC summaries of their income and expenditure at least four times a year. HMRC says this will enable a more ongoing and accurate projection of tax due, as opposed to the current system of one tax bill at the end of the year.