Making Tax Digital (MTD) for Income Tax. Are you eligible to take part in the MTD Pilot?

UPDATE: The pilot is currently closed to new participants. HMRC have not yet indicated when it will reopen.

At a glance

  • Taxpayers and their agents can sign up and participate in a voluntary Making Tax Digital (MTD) for Income Tax pilot scheme.
  • Signing up to the Pilot will mean that you will allow your software to transmit your accounting data to HMRC every three months.
  • You could sign up until February 2023. This was entirely voluntary.
  • Only certain taxpayers are currently eligible to participate.

Are you eligible to take part?

From July 2022, HMRC brought customers with the following income types into the pilot:

  • Self-employment (including multiple self-employments)
  • UK property
  • Gift Aid
  • Pay As You Earn income, including employment income and occupational pensions (excluding those with a coded out liability)
  • UK interest
  • UK dividends

Recent changes

Following the postponement of the introduction of MTD for income tax on 19 December 2022 to 2026, in February 2023 HMRC paused the pilot for new applicants whilst they refresh their testing strategy. They have not given any indication as to if and when the pilot will reopen.

Datas show that in the three years since the pilot scheme began 1015 people have participated, of these, only 218 or approximately 21% are landlords with property income. The numbers have fallen dramatically since the first year, 2018-2019, from 877 to 26 in 2020-2021 and as of January 2022, only nine were participating.  

This tool will be adjusted in due course.

MTD pilot: eligibility checker

     

Are you UK resident?

 No
You cannot join the MTD pilot as you do not fulfil the current criteria.  
 Yes ↓  
Do you have a National Insurance number? No
Yes ↓  

Are you Registered for Self-Assessment?

 No
 Yes ↓  

Have you submitted at least one Self-Assessment tax return? 

 No
 →
 Yes ↓  


Are your tax returns, tax records and details up to date?

 No
 →
 Yes ↓  
Does your business/both your businesses have a 5 April year-end? No
 →
 Yes ↓  

Was one or more of the following included within the last tax return?:



 No
 →
 Yes ↓  

Do you have to report any of the following other types of taxable receipts:

    • Employee or pension income
    • Non-UK investment income
    • capital gains
    • Taxable state benefits?


 Yes
 →
 No ↓  
Do you have any income tax charges, e.g. HICBC, pension charges?

 Yes
 →
 No ↓  

Do you have a payment arrangement in place?

 Yes
 →
 No ↓  
Are you in a partnership? Yes
 →
 No ↓  
Are you currently, or going to be, insolvent or bankrupt? Yes
 →
No ↓  
Are you a Minister of religion, Lloyds underwriter or foster carer? Yes
 →
No ↓  

Are you using, or going to start using functional compatible software that will allow you to report quarterly to HMRC?

No
 Yes↓    

Is the taxable turnover from your business/businesses above £10,000?

No

 

Your business may not be big enough to be mandated into MTD.

MTD will apply to your first accounting period that starts on or after 6 April 2024, if the taxable turnover from your self-employed business or income from property is above £10,000.

If you know that your income is less than £10,000, and is unlikely to exceed that level then MTD is voluntary for you. You can sign up to the Pilot if you wish to.

Yes↓    


Congratulations!

You have met the basic qualifying conditions to be able to join the MTD for Income Tax pilot.

See the next tab.

   


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