Making Tax Digital (MTD) is the name of the government’s scheme to move all small business tax payments online, aimed at turning HMRC into the most advanced tax administrators in the world.

Of course, no transition is as easy as we’d like it to be, and with the move to digital tax filings in full swing, there will invariably be a few growing pains as businesses adjust to the new systems and requirements.

Here at Crunch, we’ve been helping our clients with online accounting and tax filing for over ten years, and we were amongst the early adopters of MTD for VAT working with HMRC to ensure our software was ready. We’ve been MTD-compatible since spring 2019, and all of our sole traders and limited company clients are operating safely in the knowledge that we’re already on top of things. More changes are planned, however, and if you’re not a Crunch client, you need to be sure your business and/or your accountant are ready for them.

So, what’s changing, when is it changing, and what do you need to do? Let’s discuss.

Making Tax Digital for VAT

All VAT-registered businesses must keep digital records and submit their VAT returns using compatible software under Making Tax Digital (MTD) for VAT.

Originally introduced in April 2019 for businesses above the VAT registration threshold, the rules were extended in April 2022 to include all VAT-registered businesses, regardless of turnover.

This means that if your business is VAT-registered, you must:

• Keep digital VAT records.
• Use MTD-compatible software.
• Submit VAT returns to HMRC digitally.

There are limited exemptions in specific circumstances, but most VAT-registered businesses are required to comply.

If you’re a Crunch client and VAT-registered, your VAT returns will already be submitted in line with MTD requirements using compatible software, so you won’t need to take additional action

Making Tax Digital for Income Tax

Making Tax Digital for Income Tax Self Assessment (MTD ITSA), now more commonly referred to as Making Tax Digital for Income Tax (MTD for IT), will come into effect from 6 April 2026 for self-employed individuals and landlords with qualifying income over £50,000.

From 6 April 2027, the threshold will reduce to £30,000. The government has also confirmed plans to extend MTD for Income Tax to those with qualifying income over £20,000 at a later date, although a confirmed start date for this group has not yet been announced.

What do taxpayers affected by MTD for IT do?

Affected taxpayers (Sole Traders and landlords above the threshold) will need to:

• Keep digital records.
• Submit quarterly updates to HMRC.
• Submit an End-Of-Period Statement (EOPS).
• File a final declaration to confirm their tax position.

We’ve published a detailed guide to Making Tax Digital for Income Tax if you’d like to explore how it works and what you need to do to prepare.

Making Tax Digital for Corporation Tax

Making Tax Digital has been a hot topic over the last few years with HMRC trying to move to a fully digital system. There were brief discussions surrounding whether MTD would be implemented for Corporation Tax, however, in July 2025 it was confirmed as not going ahead. At least not for now.

The main reasons cited was that Corporation Tax can be complex and businesses vary hugely, so a one-size fits all approach likely wouldn’t work. HMRC also found in initial discussions and pilot schemes that the majority of businesses either weren’t ready, or simply didn’t need this heightened level of reporting.

How to prepare for changes to Making Tax Digital

If you’re unsure how exactly to meet the requirements, the answer is relatively simple: you need to get your hands on some MTD-compatible software that allows you to digitally send and store your records.

On Gov.uk, you’ll find a comprehensive list of software options that HMRC themselves have rubber-stamped as MTD-compatible. You’ll notice that Crunch feature on that list, too, so if you’d like to save yourself hours of searching and debating your options, why not give us a call?

On our Making Tax Digital Hub, you’ll find a complete breakdown of the government’s ambitions for MTD, what you need to do to prepare, and the areas which are currently subject to MTD rules.

As you can see, we’re experts in this area, and not only are we already helping thousands of people file their VAT returns in compliance with MTD guidelines, we’re also hard at work behind the scenes preparing for the future changes, too.

If you’d like Crunch to help you manage your new and impending responsibilities under the Making Tax Digital scheme, give us a call or book a callback with one of our friendly, expert advisors. In the meantime, why not head over to our pricing page for a full breakdown of the packages and services we offer?