On 21 July 2020 it was announced that MTD for VAT will be extended to all VAT registered businesses from April 2022, with income tax quarterly reporting applying from April 2023; this was extended to April 2024 in September 2021. It is expected it will be extended to Partnerships in April 2025 and Corporation tax will come into MTD from April 2026.
This will mean that from April 2022, all VAT registered businesses will be mandated to keep VAT records in a digital form. This will mean recording on approved software or spreadsheets with a bridging product, to provide electronic submission for VAT to HMRC.
From April 2024 unincorporated businesses and landlords, with gross income greater than £10,000, will need to submit electronically, quarterly summaries of business income and expenses. At the end of the year, they will be able to add any non-business income/information to complete their tax affairs using MTD compatible software. This should ultimately replace the need for a self-assessment tax return.