Making Tax Digital (MTD) is HMRC's programme to move all UK tax reporting onto digital records and quarterly submissions. It started with VAT and is now expanding to Income Tax Self Assessment for the self-employed and landlords.
In practice, MTD means three things: you must keep your records in MTD-compatible software, your data must flow digitally from record to submission (no manual re-typing), and you file more often — quarterly rather than annually.
For VAT-registered businesses, MTD for VAT has been mandatory since April 2022. Every VAT return must be filed through HMRC-recognised software using a digital link from your books to the submission.
MTD for Income Tax Self Assessment (ITSA) starts in April 2026 for self-employed people and landlords with income over £50,000, and April 2027 for those over £30,000. You'll file four quarterly updates plus a final year-end declaration.
The right cloud accounting stack turns MTD from a burden into an advantage — you always know where you stand, cashflow is clearer, and year-end becomes a formality rather than a scramble.