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Making Tax Digital with Sage

Best MTD software of 2021*

From April 2022 all VAT-registered businesses will have to comply with Making Tax Digital for VAT. Our HMRC recognised software for small businesses helps you do it with confidence.

 

Accountant or bookkeeper? Get your practice MTD ready here

What is Making Tax Digital?

Making Tax Digital requires small businesses and the self-employed to complete digital tax records and file digital returns. We’ll show you which changes you need to make and when, so you can get tax right.

How Making Tax Digital works

If you’re a VAT-registered business, you now have to keep digital records and file VAT returns using software recognised by HMRC. But don’t worry, Sage makes it easy.

Sign up for Sage and register for MTD at HMRC website

Connect your Sage Accounting to HMRC

Fill out and submit your VAT return in Sage Accounting

Why choose Sage for Making Tax Digital?

Sage Accounting makes it easy for you to be fully compliant for Making Tax Digital. You could be saving hours of time.

Import your current records with ease

Switching to digital records is quick and simple. Sage automatically imports your data from spreadsheets, CSV files, and other accounting software.

Automate your bookkeeping

Snap and capture receipts, sync with your bank, automatically categorise transactions, and have VAT percentages worked out for you. So, when it’s tax time, you’re ready.

Easily correct mistakes

Mistakes on your VAT return are easy to resolve in Sage Accounting. You can search and correct up to a thousand errors at a time. More time and effort saved.

Submit your VAT return direct to HMRC from Sage

After the final checks, it’s just a matter of submitting straight through to HMRC’s MTD system. That’s it. You’re MTD done.

Try Accounting for MTD

Manage payments, invoicing, cash flow, tax and more from any device, through the cloud.
Perfect for small businesses and sole traders.

MTD for accountants and bookkeepers

Help your clients stay compliant with Making Tax Digital software from Sage. Book a free consultation, sign up for free webinars, and access our free toolkit.

I'm an accountant or bookkeeper

Answers to your MTD questions

For more MTD knowledge and advice, check the FAQs below or visit our Sage Advice section on everything MTD VAT and Income Tax Self Assessment.

From April 2022, all VAT registered businesses with taxable turnover need to start using Making Tax Digital software so that they can submit tax returns digitally.  

The first phase of MTD started in April 2019, mandating that most VAT registered businesses with taxable turnover over £85,000 keep digital tax records. The next phases of MTD include: 

April 2022: MTD for VAT will be extended to all VAT registered businesses, including those below the VAT threshold. 

April 2024: MTD for Income Tax and Self-Assessment mandates unincorporated (sole traders and partnerships) businesses and landlords with income above £10,000. 

April 2026: The earliest possible date for MTD for Corporation Tax after the government announced it wouldn’t be mandated before then.

Keeping your records digitally for Making Tax Digital (MTD) purposes means that you must store a digital copy of the transactions which make up the figures on your VAT return. This needs to be kept in functional compatible software. Functional compatible software is software or a set of software programs which must: record and preserve digital records, send the data to HMRC through the API, and receive information from HMRC via the API. 
Sage is 100% compliant with MTD legislation. In fact, we’ve worked with HMRC on MTD for years to ensure our accounting products make it as easy as possible for you to stay compliant.  
Making Tax Digital was put in place to reduce tax admin for taxpayers, make it easier to submit returns, and reduce the likelihood of errors.  By complying with MTD legislation and adopting compliant software you’ll be able to easily view tax information in one place, and you’ll get total peace of mind that you’re compliant when all VAT registered businesses will need to complete their VAT returns under MTD rules in April 2022. 

With MTD-compliant software you can: 

  • Reduce the amount of paperwork you have 
  • Ensure VAT returns are accurate 
  • Easily manage bookkeeping from one place 
  • View real-time tax information when you need it 
  • Keep track of funds to stay on top of business 
  • Get more time back to focus on your business 
If you’re registered for VAT and your taxable turnover is above £85,000, Making Tax Digital was compulsory from April 2019. From April 2022, this will be compulsory for all businesses who are registered for VAT. This means you need to send tax returns to HMRC digitally using MTD-compliant software. 
If your taxable turnover has not gone above £85,000, you will need to comply with Making Tax Digital in April 2022. From then, the only way to opt out of Making Tax Digital is either on religious grounds (where a business is run by practising members of a religious society or order whose beliefs are incompatible with using electronic communications), if it is not reasonably practicable for you to use digital tools to submit your returns due to location (if you can’t get internet access at your home and you can’t get to another location), or if you have a disability (if you can’t use a computer, tablet, or smartphone for the amount of time it takes to keep digital records). If you believe your business is exempt, you must contact HMRC to confirm. 

Right now, only UK VAT-registered businesses are affected by MTD. However, there’s a goal for all UK businesses to comply in future. 

April 2022: MTD will apply to VAT registered businesses with taxable turnover below £85,000. 

April 2024: Self-employed businesses and landlords with property income over £10,000 will need to follow MTD Income Tax rules from their next accounting period. 

April 2026: MTD for Corporation Tax is expected to begin.  

Download the ultimate guide to Making Tax Digital

Learn about Making Tax Digital (MTD) and what HMRC’s new scheme means for your business, and discover the steps you need to take now to submit VAT returns.

MTD news and advice

Get articles, insights and tips to help with your preparations for Making Tax Digital from Sage Advice, our business blog.

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Making Tax Digital checklist: How to ensure you're ready for MTD for VAT in April 2022

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MTD for Income Tax: 8 things your business needs to know now

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