When does Making Tax Digital (MTD) start?

MTD is gradually being phased in and will eventually apply to all taxes.

The first stage applies to VAT registered businesses. From April 2022 all VAT registered businesses need to use HMRC compatible software to file their VAT returns. There will no longer be an option to do this via the HMRC portal or on paper.

The next stage begins in April 2026 and will apply to Income Tax, but only to a select number of people, namely landlords and sole traders who have income of more than £50,000.  Partnerships will not be required to join until a later date, still to be announced. Records will need to be maintained in digital format and quarterly online reporting will be required.