Skip to content

Definition of Making Tax Digital

Making Tax Digital is a government initiative that sets out a vision for ‘a transformed tax system and the end of the tax return’ by 2020.

The aim of the initiative is to make tax administration more effective, more efficient and easier for taxpayers, through the implementation of a fully digital tax system.

The changes outlined in the Making Tax Digital initiative will apply to a wide range of taxpayers, including most businesses, self-employed people and landlords, as well as individual taxpayers.

What’s changing?

HMRC has released consultation papers that outline what it’s planning to do and ask for feedback from taxpayers and their accountants.

It’s also now released summaries of responses to the consultations.

The current plans, in brief, are:

  • The smallest businesses will be exempt from MTD – the original proposal was for “smallest” to be “turnover of £10,000” but following the consultation responses, this figure may change.
  • Taxpayers will send in summaries of their income and expenditure at least four times a year.
  • More taxpayers will be able to use the cash basis of accounting.

When will the changes happen?

Making Tax Digital has a phased roll-out plan which started in early 2016 and is set to end in 2020. Anticipated key milestones include:

  • April 2017 – Pilot of roll-out starts.
  • July – December 2017 – Digital tax accounts show taxpayers an overview of their liabilities in one place.
  • July – December 2018 – Most businesses, self-employed people and landlords start updating HMRC quarterly for income tax and national insurance obligations through accounting software.
  • 2019 – Most businesses, self-employed people and landlords start updating HMRC quarterly for VAT obligations through their accounting software.
  • 2020 – The full range of HMRC services is available through digital tax accounts.

More about Making Tax Digital

More information about the Making Tax Digital initiative, along with a detailed breakdown of timescales and milestones, is available from

As the owner and founder of the business, I am responsible for overseeing a range of key activities. These include managing client relationships, spearheading new business development, and crafting the company's development and strategic plans.

Share this


3,710 trees and 11 projects funded

Follow us
Institute Of Financial Accountants
Freeagent Partner
Quickbooks Platinum Pro Advisor