MTD and the cloud

MTD for income tax

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In addition to new digital reporting requirements for VAT, the Government has announced that from April 2023, businesses, including sole traders and landlords with business income over £10,000 per year MUST file their business income tax returns with HMRC using MTD digital reporting software.

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For more information on MTD and how we can help your business become compliant, get in touch with us now.

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What software will I need to be MTD compatible?

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You will need to use what is defined as ‘functional compatible software’ to comply with HMRC requirements.

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This means software that connects to HMRC’s systems via an Application Programming Interface (API). It can be a single program or a set of programs, so long as those programs are ‘digitally linked’.

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Your software must be able to:

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• Retain and preserve records digitally
• Create VAT returns and send them to HMRC digitally
• Voluntarily provide HMRC with VAT data
• Receive information from HMRC that your business has complied.

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How will the rules differ regarding digital records?

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• The major difference is that you will be required to submit your digital records at least once every three months.

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Your business will also be required to maintain records for your VAT account. All digital records will need to be retained for a minimum of six years.

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For more information on how we can help you ensure that your digital reporting and data storage is compliant, get in touch with us.

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