Making Tax Digital, in plain terms

MTD is two requirements that get discussed as one: keep your records digitally, and file through software rather than typing figures into the HMRC website. Most of the confusion is about what counts as digital, and about digital links.

What MTD actually requires

Digital record keeping means your transactions live in software, not on paper or purely in your head. Filing through compatible software means the figures reach HMRC through an API rather than being retyped into a web form.

  • Records kept digitally from the point of entry
  • Returns submitted through compatible software
  • Data moving between systems by digital link, not by retyping

Digital links are the part people miss

A digital link is any transfer that does not involve a human retyping a number. A formula between spreadsheet cells is a digital link. An API call is a digital link. Reading a total off one screen and typing it into another is not, even if both systems are digital. This is the requirement that catches out otherwise compliant spreadsheet setups.

How filing actually works in Taxmo

For VAT, the whole path is inside the product. You authorise Taxmo against your HMRC account once, through HMRC's own sign-in screen, and Taxmo then talks to the Making Tax Digital API on your behalf.

  • Your open VAT obligations are read from HMRC, so you file against the period HMRC is actually expecting
  • The nine boxes are worked out from your own records, not typed in
  • A pre-filing checklist runs first and blocks on the things that make a return wrong
  • You see the return, declare it final, and it is submitted over the API
  • HMRC's receipt comes back and is stored in your filing history

MTD for Income Tax

MTD is already in force for VAT. The Income Tax timetable has been revised more than once, and the mandation date depends on your income level and circumstances. We deliberately do not print a date here, because a wrong one would be worse than none. Check the current position for your situation on GOV.UK. Quarterly submission for Income Tax is marked as coming; VAT submission is live today.

Common questions

Can I still use a spreadsheet under MTD?

Yes, if it is linked digitally to compatible filing software. A standalone spreadsheet where you copy the totals across by hand does not meet the requirement, because that copy is not a digital link.

Does MTD apply to me if I am not VAT registered?

Not for VAT. MTD for VAT applies to VAT-registered businesses. MTD for Income Tax will bring in unincorporated businesses and landlords above an income level, on a timetable that has moved before, so check the current date and threshold on GOV.UK.

Is Taxmo MTD compatible for VAT?

Yes, for VAT. Taxmo keeps your records digitally, works out the nine boxes from those records, and submits the return to HMRC over the Making Tax Digital API. You link your HMRC account once, Taxmo reads your open obligations so you file against the right period, and HMRC's confirmation comes back into your filing history. Nothing is retyped into the HMRC website at any point, which is the requirement MTD is actually about.

Is Taxmo MTD compatible for Income Tax?

Not for filing. MTD for Income Tax quarterly submission is marked as coming rather than available, and we will not pretend otherwise while the mandation timetable is still moving. Your records are kept in the form it will need.

Last updated 2026-04-25. Thresholds, rates and allowances are indexed or reset at fiscal events and are deliberately not quoted here; check GOV.UK for current amounts.