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MTD pilot for self-employed taxpayers

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HMRC has issued a guide for self-employed taxpayers intending to take part in the making tax digital pilot. Sole traders with a current accounting period ending after 5 April 2018 can use software to keep digital business records and send income tax updates to HMRC. In certain cases, this will remove the need to file a self-assessment return after 2017/18 (see

Two sets of statutory directions set out HMRC’s detailed conditions for using relevant software and for giving and withdrawing consent to electronic communications.

  • Directions under regulations 3(3) to 3(6) and 5(3) of the Income and Corporation Taxes (Electronic Communications) Regulations 2003, set out the conditions for businesses to submit MTD information to HMRC using ‘relevant’ or ‘compatible’ software, and the six-year record-keeping requirement for end-of-year submissions. These directions came into force on 16 March 2018.
  • Directions under regulation 3(1ZA) of the Income and Corporation Taxes (Electronic Communications) Regulations 2003, specify how users of self-assessment online and the MTD for business service can give, or withdraw, their consent to electronic communications with HMRC. The directions have effect from 16 March 2018 and revoke directions concerning the provision and withdrawal of consent in force since 7 April 2014.