Back
Let us sort your Self Assessment today. Stress-free. For £119, all in. Learn more

Making Tax Digital (MTD): why you don’t need to worry

Making Tax Digital (MTD) is an HMRC initiative that is hyped as the “big thing” that will revolutionise the UK tax system and “kill” the annual Self Assessment tax return.

Many software providers are mentioning MTD and how to become compliant, but the reality is, 99% of the people don’t need to worry.

What does Making Tax Digital actually mean?

Basically instead of reporting your income and expenses once a year, you’ll be reporting quarterly (every 3 months).

You’ll also have to keep digital records instead of paper receipts.

Does it apply to me?

For the 2019/2020 tax year, only limited companies and self-employed people earning over £85,000 and who are already registered for VAT have to join the MTD scheme.

This is only for VAT reporting at this point – it’s not a huge change, just switching paper receipts for digital records, and using one of the software packages listed on this HMRC page.

Should I do anything?

HMRC plans to make MTD available to all sole traders (and also landlords) by next tax year (April 2020). At that point you will also have to use MTD for Income Tax and National Insurance.

This means that you won’t have to do an annual Self Assessment tax return anymore. Instead you’ll have to report your earnings and expenses 4 times a year – and also use one of these pieces of software.

However, HMRC has postponed MTD deadlines before – and it might do again for the coming year as well.

On top of this, people earning income from multiple sources (for example, you’re both employed and self-employed) will likely not be able to use MTD next year either.

In any case, we’re monitoring this, and we’ll help you if and when you need to do anything.

Hey there! We really hope this article helped you. Tax matters can be a dreadful topic at times. We know. That's why we started TaxScouts.
A stress-free way to getting your taxes done.

Have a minute? See how it works

More guides & useful information

Let us sort your Self Assessment online. £119, all in.

That’s right. No matter how complicated it gets or why you need to do a return in the first place, it’ll cost £119 to get it done. That includes VAT, last-minute changes and all the support you may need.

How it works

1. Answer a few simple questions

And we mean a few. After a couple of minutes of answering questions online we’ll have everything we need to start working on your tax return.

2. Then get paired with a tax accountant

That’s right, you’ll be matched with a real accountant who is best suited to prepare your return. Plus, they’re on hand for questions whenever you need.

3. We file your Self Assessment for you

Once you’ve signed off your return, your TaxScouts accountant will file your return online with HMRC. That’s it! We told you it was simple.