What is MTD?
It is an HMRC initiative that will allow the UK tax system to be more effective and efficient and should make it easier for tax payers. The over all aim is to make filing tax simpler.
The initiative comes into force on 1st April 2019 with the element relating to VAT. All businesses that are VAT registered will be required to comply by this date. The scheme will be extended to other tax processed such as income tax and corporation tax at a later date.
The rules around VAT are the same it is only how you submit the VAT information that is changing. Companies will be required to keep digital records and submit returns using Accounting software.
If you are using Accounting Software such as Xero and Quickbooks and you submit your VAT returns via that software then you are compliant for the first stage. If you are submitting via the Government gateway then you are not compliant.
For a list of software that is compliant follow the link below:
For more information on the scheme itself then the link below gives you more information on the HMRC website:
https://www.gov.uk/government/publications/making-tax-digital/overview-of-making-tax-digital