What is Making Tax Digital (MTD)?

Zenya Allen
Zenya Allen
  • Updated

Making Tax Digital is a key part of the government's plans to make it easier for individuals and businesses to get their tax right and keep on top of their affairs.  

HMRC's ambition is to become one of the most digitally advanced tax administrations in the world.

Making Tax Digital is making fundamental changes to the way the tax system works, transforming tax administration to become... 

  • more effective 
  • more efficient
  • easier for tax payers to get their tax right

From April 2019, most VAT registered businesses with a turnover above £85,000 must keep their VAT records digitally and use Making Tax Digital compatible software to submit their VAT returns.  

The tax digital transfer is mandatory from April 2021.

This article includes: 

What is MTD compatible software?

Functional compatible software is a software program, or set of software programs, products or applications, that must be able to: 

  • Record and preserve digital records 
  • Provide to HMRC information and returns from data held in those digital records by using the API platform
  • Receive information from HMRC via the API platform

Is my WinMan SDB software MTD compatible?

WinMan SDB does not hold all the information for filling in a VAT return so cannot be MTD compatible on its own.  However, it does record and preserve digital records so when used alongside other programs, it is still a component of functional compatible software.  

To find out which accounting software is compatible and can link to the HMRC API, go to: https://www.gov.uk/guidance/software-for-sending-income-tax-updates

Have any changes been made to WinMan SDB for MTD?

Where WinMan SDB is used as a component of functional compatible software, there needs to be a digital transfer between it and the software that will be in communication with HMRC via the API.  

WInMan SDB holds the transaction level details so all that needs to be included in the transfer is the summary of the information that allows your business to compile your VAT return. We have provided a Utility within WinMan SDB that will produce files that you can import directly into Xero, QuickBooks or Sage. Please see the Making Tax Digital (MTD) user guide for more information.