Diploma in Professional Accounting
Diploma for Financial Advisers
Member of London Institute of Banking and Finance

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Making Tax Digital (MTD) is a government programme that changes the way individuals and businesses keep their records and submit tax information to HMRC. If you’re unsure how to get started, this article explains everything in simple terms.

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1. How Do I Register for Making Tax Digital?

To register for Making Tax Digital, you need to sign up on the official GOV.UK website. The process depends on whether you are signing up for VAT, Income Tax, or Corporation Tax (VAT is currently the most common). You will need:

• Your Government Gateway user ID and password.
• Business details (such as VAT registration number if you are VAT-registered).
• Details of the software you’ll use to keep records.

Once you sign up, HMRC will confirm by email or letter when you are in the scheme.

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2. Can I Use a Spreadsheet for Making Tax Digital?

Yes, you can use a spreadsheet for Making Tax Digital, but it must be linked with MTD-compatible software. This is done using “bridging software” which connects your spreadsheet to HMRC’s system. HMRC has a list of compatible software.

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3. Do I Need to Register for MTD?

Not everyone needs to register straight away. You must register for MTD if:

• You are VAT-registered with a taxable turnover above £85,000.
• You are voluntarily VAT-registered and choose to join.
• From April 2026, many self-employed and landlords with income over £50,000 will also need to use MTD for Income Tax.

Check the latest rules on GOV.UK.

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4. What Records Do I Need for MTD?

You must keep digital records of your business income and expenses. These include:

• Sales invoices.
• Purchase receipts.
• VAT records (if VAT-registered).

These records must be kept in MTD-compatible software or spreadsheets linked with bridging software.

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5. How Do I Know If I Have Signed Up for Making Tax Digital?

Once you have successfully signed up, HMRC will send you a confirmation email or letter. You will also notice changes in your online HMRC account, where you can view and submit VAT returns (or other returns) through the MTD system.

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6. What Happens If I Miss an MTD Deadline?

If you miss an MTD deadline, you may face penalties. HMRC has introduced a points-based system for late submissions. Each missed deadline adds a point, and once you reach the penalty threshold, you’ll have to pay a fine. You may also face interest charges for late payments. Full details are on GOV.UK.

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Final Thoughts

Setting up for Making Tax Digital may feel complicated, but once you’re registered and using the right software, it becomes much easier. Always check the latest information on GOV.UK to make sure you stay compliant.

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