What is Making Tax Digital (MTD)?

Originally announced by George Osborne in his 2015 Budget, MTD is a Government initiative to update the UK’s tax system by implementing a fully digital tax system where taxpayers are legally obliged to keep digital records and use MTD compatible software to make tax submissions electronically.

The aim is for HMRC to become one of the most digitally advanced tax administrations in the world. The main aims of Making Tax Digital are to make the tax system:

· more effective

· more efficient

· easier for taxpayers to get their tax right

A 2017 government-commissioned report suggests errors and failure to take reasonable care accounts for £9.4bn of tax lost annually. In helping businesses get their tax obligations right first time, MTD will also provide more certainty and a clearer view of their tax position.

Who will be affected?

The first phase of MTD was introduced in 2019 and covered VAT for VAT-registered businesses with an annual turnover above the VAT threshold.

The government is extending the requirement to operate MTD to the 4.2m taxpayers with business and/or property income over £10,000, including landlords, sole traders, and partnerships, for their Income Tax obligations. These changes will apply to businesses, self-employed individuals and landlords who are chargeable to Income Tax.

Timeline for MTD:

· From April 2019: MTD VAT is mandatory for VAT-registered businesses and organisations with taxable turnover above the VAT threshold of £85,000.

· From April 2022: It became a legal requirement for all VAT registered businesses to register for Making Tax Digital (MTD), thereby removing the VAT threshold requirement. Click here to read more about MTD – VAT

· From April 2024: MTD Income Tax Self-Assessment (ITSA) will be mandatory for the self-employed and those with income from property. It will only apply to those with turnover from self-employment plus gross income over £10,000. Click here to read more about MTD – ITSA

· From April 2025: MTD ITSA will be mandatory for general partnerships with annual turnover greater than £10,000

· From April 2026: MTD Corporation Tax. The MTD corporation tax consultation suggests a pilot could be launched in 2024 with a full rollout not before April 2026.

Our cloud accounting credentials

We don’t just understand digital and cloud accounting, we excel at it. We’re a Xero Platinum Partner and were the first accountancy firm in the world to receive a Xero migration certification. Our 5-star ratings on Reviews.io and Google are a result of the strong relationships, satisfaction and trust we have built with our clients.

We can support you with the following:

· Transitioning to accounting software, including advising on the best options and providing software training

  • Providing bridging software
  • Registering for MTD
  • Reviewing current processes for confidence of compatibility
  • Advice/support on claiming MTD exemptions

What our clients say about us

Gina Wood
Dipesh Radia has always been most professional and friendly in his emails and telephone conversations. He is very knowledgeable in all areas of tax affairs. Overall the service received has been of a very satisfactory level. Communication is excellent which is key to maintaining a good relationship with clients
Mark Ellis
Elsby & Co look after all my Tax and accounting needs, both personal and Business, and I am completely happy with the service they provide. In all of my dealings, whether by phone or e mail, I have always found all staff to be extremely pleasant....Polite, capable ,professional and easy to talk to. If I have had any questions or queries, they have always answered them straight away, fully and to my complete satisfaction. Responses to my mails or calls has been virtually immediate. I have every faith in them to always look after my best interests and therefore I would happily recommend Dipesh and the whole Elsby and Co team to my family and friends.
Zane Oliver
I had the pleasure of working with James from Elsby & Co as my accountant, and I cannot recommend him enough. James is an expert in his field, and he provided me with fantastic accounting services that went above and beyond my expectations. James took the time to understand my business and my financial needs, and he provided me with tailored advice and solutions that helped me to improve my bottom line. He is knowledgeable, efficient, and detail-oriented, ensuring that all of my financial records were accurate and up-to-date. In addition to his technical abilities, James is also a pleasure to work with. He is friendly, approachable, and always available to answer any questions I had. He made the often-daunting process of managing my finances a breeze, and I always felt confident that my financial affairs were in good hands. Overall, I cannot recommend James and Elsby & Co enough. If you are looking for an accountant who can provide you with top-notch services and help you to achieve your financial goals, look no further. James is the best in the business, and I guarantee that you will not be disappointed!
Colin Halford
Formerly Trevor Newell Accountants, i was a little apprehensive when i learnt a new accountants would be doing my accounts. Dipesh is now my accountant & after a little misunderstanding on my part probably i am happy with how things work & that he is doing a good job on my behalf & explains things well.
Emma Fletcher
Elsby & Co recently performed an external audit for us for a grant fund claim. The process was simple and efficient and the team were very helpful.
Ben Verinder
Professional. Prompt to respond to queries. Good team and really really useful advice.
Very professional, knowledgable and friendly team, everyone goes above and beyond ! I couldn’t recommend Elsby & Co highly enough !!!
Sam Etemadi
The level of advise, care and professionalism is next to none. Our company, Dr S Etemadi Dental Practice Ltd, has been a client for many years and intends to stay for many more years to come. Highly recommended.
Sam Etemadi
A very big Thank You to Leona, James, Natalie, Sarah, Sarah, Charlotte, Rebecca and everyone else in this firm who are always there to lend a hand when you need advice and help. One of the best!
Nic Brough
Personal tax has become complex for me, and Elsby were able to review my position and do a professional job of filing the return for me, incidentally helping me save some money as well as giving me two days back. Very helpful and friendly, as well as clear and fast.

We focus on giving you the right advice to help your company grow