MTD
Who? What? When? Where? Why?
Who?
MTD will affect, at first, anyone who’s business has a £50,000 or greater turnover.
What?
MTD is a new process that HMRC has created to help self employed people to send in quarterly returns compared to an annual one. This will also mean that the returns are in Real time compared to the current set up being 9 months later that the information provided.
When?
The first wave of MTD will start in April 2026. (this has been 10 years in the making, due to various issues and changes HMRC has found)
The Second wave of MTD will start: April 2027: Anyone who has a turnover between £20,000 – £50,000
The final wave, is anyone who hasn’t fallen into these first waves, will be from April 2028.
Where?
Geographically, this will be a UK-wide spread process.
Logistically, you will only be able to submit these returns using specialised software. Digital records will be highly favourable, although some accountants may still be ok with paper or physical records.
Why?
HMRC have created this process so that errors and misunderstandings become a thing of the past. With the quarterly returns, any issues or mistakes that have been made can be correctly in a timelier manner.
They also will encourage digital record keeping which will help keep things organised and leave less room for errors.
What you need to know next:
Step 1: Confirm with us which wave you’re included in (speak to us if you’re not sure) Have you received a letter from HMRC? This will help to confirm which wave you’re in.
Step 2: Confirm with us how best to handle digital records, or if this isn’t possible, how we can help moving forward. This may be a case of bringing in your records on the monthly basis so we don’t miss a deadline. (Especially if your VAT registered, and your VAT quarters don’t match with the MTD quarters)
Step 2.5: if you want to, we can help set you up with the software that we use and we can offer training and help with keeping your records up to date.
Step 3: We’ll need all your records up to date from April 2025 so that we can get the ball rolling.