What is Making Tax Digital (MTD?) - Expert Agent Documentation

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FAQs

Making Tax Digital (MTD) is a UK government initiative designed to make it easier for individuals and businesses to get their tax right.

It requires certain taxpayers to keep digital records and submit tax information to HMRC using Making Tax Digital compatible software.

What are the current Making Tax Digital requirements?

MTD for VAT

Making Tax Digital is already in place for VAT and replaces the manual submission of tax returns through the HMRC portal. Most VAT registered businesses regardless of turnover must:

Keep their VAT records digitally
Use Making Tax Digital compatible software to submit their VAT returns to HMRC

The aim of this is to:

Reduce errors caused by manual processes
Improve the accuracy of tax submissions
Create a more efficient and transparent tax system

For more information on how Making Tax Digital works in practice within Expert Agent, see the Making Tax Digital for VAT - User Guide.

MTD for Landlords (income tax)

Making Tax Digital (MTD) for Income Tax currently requires landlords earning over £50,000 to keep digital records and submit quarterly reports to HMRC using approved software. While letting agents can provide income and expense data, landlords remain solely responsible for tax compliance and MTD submissions. This is due to be rolled out in stages with it becoming mandatory in April 6, 2027 for those earning over £30,000 and then in April 6, 2028 for those earning over £20,000.

For more information on how you can assist your landlords in meeting their Making Tax Digital requirements, see the Making Tax Digital Statement - user guide.

What is Making Tax Digital compatible software?

Making Tax Digital compatible software is a software program, or set of software programs, products or applications, that must be able to:

Record and preserve digital records
Provide to HMRC information and returns from data held in those digital records by using the API platform
Receive information from HMRC via the API platform

Is Expert Agent Making Tax Digital compatible?

Expert Agent doesn't hold all the information for filling in a VAT return so it cannot be HMRC making tax digital compatible on its own.

However, Expert Agent does record and preserve digital records so when used alongside other programs, it is still a component of HMRC compatible software.

To find out which accounting software is compatible and can link to the HMRC API, visit https://www.gov.uk/guidance/software-for-sending-income-tax-updates.

You are able to produce statements for your landlord to use for their income tax submissions, and a report for you as the agent to use for your VAT submissions.

Making Tax Digital for VAT - User Guide

Making Tax Digital Landlord Statement for Income Tax