Tax
What Making Tax Digital means for your company
Making Tax Digital applies to your company's VAT, not to its Corporation Tax. Whether it touches you personally depends on income outside the company.
6 min read Last reviewed
This guide is general information, not tax or legal advice. Rules change; check the sources, and speak to an accountant about your own situation.
The UK Budget on 28 October 2026 may change rates and thresholds for later years. This guide will be reviewed after it.
What Making Tax Digital is
Making Tax Digital is HMRC's programme for keeping tax records digitally and sending returns from software rather than typing figures into a website. It applies tax by tax, on its own timetable.
VAT: every VAT-registered company
Since April 2022, every VAT-registered business must follow Making Tax Digital for VAT, whatever its turnover: keep digital records and file VAT returns through compatible software.
A return and its payment are usually due one calendar month and seven days after the end of the VAT period.
You must register for VAT when taxable turnover over the last 12 months goes above £90,000, or you expect it to in the next 30 days.
Income Tax: not your company — maybe you
Making Tax Digital for Income Tax applies to sole traders and landlords: people with income from self-employment or property above a threshold. It starts from April 2026 for qualifying income over £50,000, April 2027 over £30,000, and April 2028 over £20,000.
A limited company is not in it. Salary from your company and dividends you receive do not count towards the threshold. You come into it as a director only if you also have sole-trader or property income above the threshold.
Corporation Tax and company accounts
HMRC has said it does not intend to introduce Making Tax Digital for Corporation Tax. The government has announced "real-time digital prompts" inside software instead — in VAT software from April 2027 and in Corporation Tax software from April 2028 — to help businesses get things right as they go.
Separately, Companies House has announced that from 1 April 2028 annual accounts must be filed through software in a digital format.
Next: e-invoicing
The government has announced that from April 2029 VAT invoices between businesses will have to be e-invoices, with Peppol as the core network that carries them. The detailed roadmap is due to be published.
What to do now
- If your company is VAT-registered, check its records are kept digitally and its returns go through compatible software.
- If you have rental or sole-trader income as well, check whether it brings you into Making Tax Digital for Income Tax.
- Keep an eye on April 2028 for accounts filing, and April 2029 for e-invoicing.
Sources
- GOV.UK — Making Tax Digital for VAT (opens in a new tab)
- GOV.UK — VAT return deadlines (opens in a new tab)
- GOV.UK — When to register for VAT (opens in a new tab)
- GOV.UK — Check if you're eligible for Making Tax Digital for Income Tax (opens in a new tab)
- GOV.UK — Work out your qualifying income (opens in a new tab)
- HMRC Transformation Roadmap (opens in a new tab)
- Budget 2025 (opens in a new tab)
- Companies House — changes to accounts filing from April 2028 (opens in a new tab)