MTD and the cloud

MTD for income tax

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.

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

What software will I need to be MTD compatible?

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

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’.

Your software must be able to:

  • 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.

How will the rules differ regarding digital records?

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

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.

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

LATEST NEWS FROM Bishops

November 19, 2025

Have You Received a Letter from HMRC About Making Tax Digital?

HM Revenue and Customs (HMRC) are writing to some taxpayers to tell them what they need to do to get ready for the new Making Tax Digital rules that come into force next April.
read article
November 17, 2025

UK Unemployment Rises to 5% as Job Market Shows Signs of Strain

The UK unemployment rate has risen to 5% in the three months to September, the highest since early 2021, according to the latest figures from the Office for National Statistics (ONS). The increase was slightly higher than expected and adds to signs that the jobs market is starting to soften.
read article