Who does MTD apply to?

Key facts:

MTD will eventually apply to all individuals that do tax returns as well as companies with sales of more than £50,000 per annum from 2026 and £30,000 from 2027.

Right now, MTD applies to all VAT registered businesses.

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Who does MTD for VAT apply to?

MTD for VAT now applies to all VAT-registered businesses.

There are some exceptions to the requirement to submit VAT returns although they will apply to very few businesses. The exemptions are as follows:

• Religious objections

• No internet connection available

• Disability

• Age

• The business is insolvent

Implementation of MTD for VAT will be delayed by six months to 1st October 2019 for around 3.5% of organisations that would otherwise have to comply from 1st April 2019. These are not for profit organisations that are not set up as a company, trusts, VAT divisions, VAT groups, public sector entities which must give additional information on their VAT return (examples are government departments and NHS Trusts), local authorities, public corporations, traders based overseas, plus those making payments on account and using the annual accounting scheme.

HMRC is focusing on MTD for VAT and details of the follow-on implementations are not yet clear.

Who does MTD for ITSA apply to?

MTD for income tax (MTD for ITSA) will apply to individuals with total gross income from self-employment and property that exceeds £50,000 annually from April 2026 and £30,000 from April 2027.

MTD for corporation tax is likely to be introduced some years later. HMRC is also running a project which will introduce a Personal Tax Account (PTA) for individuals.

Additional useful information

• MTD for Income Tax Self Assessment - What it means for your business
• Making Tax Digital and the role of your accountant
• What are the penalties for non-compliance with MTD?
• What is MTD for VAT?
• MTD FAQs
• Trade and Construction Blogs
• 3 ideas for the government to help the trade industry help the nation