Making Tax Digital (MTD) is a program launched by HM Revenue and Customs (HMRC) to digitise tax reporting and payment processes.

The program aims to make it easier and more efficient for individuals and businesses to manage their tax affairs by requiring them to keep digital records of their income and expenses, and submit tax returns through compatible software or apps. This replaces the traditional paper-based system of tax reporting.

MTD was launched for VAT registered businesses with a taxable turnover above the VAT threshold (currently £85,000) in April 2019 and now applies to all VAT registered businesses. The program is being rolled out to other taxes such as Income Tax and Corporation Tax, but at a slower pace, with HMRC having to put some of their plans on hold. 

The goal of MTD is to make tax administration more effective, efficient, and easier for taxpayers and HMRC, while reducing errors and fraud. Most of the accounting software that we use is already MTD compatible.