Skip to content 
Making Tax Digital: Your 2025 Guide
The UK’s tax system is undergoing its most significant transformation in a generation. Making Tax Digital (MTD) is HMRC’s flagship initiative to create a modern, digital tax administration system.
This guide is built on the latest official HMRC policy papers and manuals to provide you with a clear, accurate, and authoritative overview. We cut through the confusion to explain what MTD means for you, with all information validated against current government resources.
What is Making Tax Digital? The Core Principles
At its heart, MTD is built on three simple but mandatory requirements:
- Keep digital records of your income and expenses.
- Use MTD-compatible software to communicate with HMRC.
- Submit quarterly updates followed by a final end-of-period declaration.
The goals are to make the tax system more effective, reduce errors, and give you a real-time view of your tax position.
The MTD Roadmap: Where Are We Now?
The rollout is well underway. The following timeline visualises the current state of play and the confirmed future deadlines.
MTD for VAT: This is Now Standard Practice
MTD for VAT is the established norm. If you are VAT-registered, you are already required to maintain digital records and submit your VAT returns through MTD-compliant software. This has fully replaced the old HMRC portal for VAT filings.
MTD for Income Tax (ITSA): The Next Major Phase
he Government has provided a clear, phased timeline for the introduction of MTD for Income Tax, starting in April 2026. This will affect:
- Sole traders and landlords with a total gross income from business and property exceeding £50,000.
- The threshold will then drop to £30,000 from April 2027, and is expected to include those with income over £20,000 from April 2028.
What changes for you? The annual Self-Assessment tax return is replaced by a new rhythm: four quarterly updates of your income and expenses, followed by a final declaration that finalises your tax position.
A Proactive Step from Global Forum: HMRC will use your 2024/25 tax return data to determine your eligibility for MTD from April 2026. We are proactively working with our clients to ensure this foundational information is accurate and complete, setting the stage for a smooth transition.
MTD for Corporation Tax: On the Back Burner
In its latest Transformation Roadmap, HMRC has stated it has no foreseeable plans to introduce MTD for Corporation Tax. Instead, it is focusing on developing a future approach suited to the diverse range of companies that pay CT. While digitalisation is inevitable, an MTD-style mandate for CT is not imminent.
Your Practical Guide to MTD for Income Tax
Quarterly Updates: The New Rhythm
You will submit cumulative summaries of income and expenses to HMRC. The deadlines are strict, designed to keep your tax affairs current.
| Period Covered (Tax Year) | Filing Deadline |
|---|---|
| 6 April to 5 July | 5 August |
| 6 July to 5 October | 5 November |
| 6 October to 5 January | 5 February |
| 6 January to 5 April | 5 May |
The Final Declaration: Replacing the Tax Return
After your fourth quarterly update, you will make a final end-of-period declaration. This is where you:
- Make accounting adjustments (e.g., for prepayments or accruals).
- Claim capital allowances and other reliefs.
- Finalise your tax position for the year.
Important: MTD for IT does not abolish the need for a final tax calculation; it changes how you report the data throughout the year.
Software: Your Digital Gateway
Using MTD-compatible software is not optional. Fully compatible, cloud-based platforms like Xero and QuickBooks are the gold standard. They automate record-keeping, provide real-time tax estimates, and submit updates directly to HMRC, simplifying the entire process.
Global Forum Consulting specialises in selecting, setting up, and managing this software for our clients, ensuring full compliance from day one.
Exemptions: Who Doesn’t Have to Join?
Exemptions are available for those who are digitally excluded due to disability, location, age, or religious beliefs. Foster carers and those without a National Insurance number are also exempt. Applications for exemption must be made directly to HMRC.
Your 4-Step Action Plan for MTD Compliance
Adapting to MTD doesn’t have to be daunting. Follow this practical plan to ensure a smooth transition.
1. Adopt MTD-Compliant Software
This is the cornerstone of compliance. The right software digitises record-keeping, automates calculations, and submits returns directly to HMRC. We help you choose and implement the perfect platform for your business.
2. Embrace Quarterly Habits
The era of the January tax rush is over. Develop the habit of reviewing and submitting your figures every three months. This gives you a real-time view of your tax liability and helps you manage cash flow effectively.
3. Plan for the Final Declaration
Remember, quarterly updates are summaries. The final declaration is crucial for making accounting adjustments and claiming reliefs. We manage this entire process for you, ensuring your position is fully optimised and accurate.
4. Partner with an Expert
The rules are complex and the stakes are high. Partnering with Global Forum Consulting ensures you choose the right software, meet all deadlines, and leverage the new system for better tax planning—all without a last-minute scramble.
How Global Forum Consulting Ltd. Guides You Through MTD
We are more than just compliance experts; we are your strategic partners in navigating the digital tax future. Our services include:
- MTD Readiness Assessment: We review your current situation and provide a clear, tailored plan for your transition.
- Software Integration & Training: We handle the setup of your MTD-compliant software and ensure you or your team are confident using it.
- End-to-End Submission Management: From quarterly updates to the final declaration, we manage all submissions to HMRC on your behalf.
- Proactive Tax Planning: With access to real-time data, we provide more dynamic advice to help you minimise your tax liability and improve cash flow.
Don’t navigate this transition alone. Let Global Forum Consulting be your guide.
Contact us today for a consultation. We’ll ensure you are fully prepared, compliant, and ready to turn MTD from a challenge into an advantage for your business.
