Does Making Tax Digital Apply to Partnerships

Team Nomi

May 22, 2026
5 minutes read

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Confused about whether Making Tax Digital applies to partnerships? The rules have changed, and the timeline has shifted.

The rollout of Making Tax Digital (MTD) for partnerships, originally planned for April 2025, has been postponed following a government announcement in December 2022. While a revised start date has not yet been confirmed, the shift toward digital record-keeping continues across the UK tax system, and partnerships are expected to be included.

MTD rules already apply to VAT-registered businesses, and from April 2026, sole traders and landlords with annual income above £50,000 must comply with MTD for Income Tax Self Assessment (ITSA). This includes using HMRC-recognised software, maintaining digital records, and submitting returns online. Partnerships are likely to follow next.

Are Partnerships Required to Join MTD for Income Tax?

As of now, partnerships are not required to join MTD for Income Tax. The original plan for making tax digital for partnerships was to bring general partnerships into the system from April 2025.

However, following the delay announced in December 2022, HMRC has not yet set a new mandatory start date. Despite this, partnerships should treat this as a preparation window rather than a pause, because once introduced, compliance will be mandatory.

Does Making Tax Digital Apply to Partnerships?

Yes, Making Tax Digital will apply to partnerships in the future, but not yet. The government originally planned to require general partnerships to comply with MTD for Income Tax from April 2025, but this has been postponed.

What Is Making Tax Digital for Partnerships?

Making Tax Digital for partnerships will change how partnerships report tax by requiring digital record-keeping and submissions through compatible software. Although the rollout of Making Tax Digital partnerships rules has been delayed, the direction is clear, manual processes will be phased out.

General Partnerships:
General partnerships were originally expected to join Making Tax Digital for partnerships under MTD for ITSA from April 2025. While the timeline has shifted, these rules are still expected to apply. Preparing now will make the transition much easier when the requirement is enforced.

Limited Liability Partnerships (LLPs) and Partnerships with Corporate Partners:
There is currently no detailed timeline for these more complex structures. If you are wondering whether MTD apply to partnerships like LLPs, the answer is yes in the future. Waiting for confirmation could leave you unprepared, so early action is strongly recommended.

Why Was the Rollout Delayed?

The government postponed MTD for partnerships to give businesses more time to prepare, acknowledge the current economic climate, and enable a smoother, phased introduction.

This delay also gives HMRC and the software industry more time to refine the supporting systems that partnerships will use.

How Should Partnerships Prepare for MTD?

Partnerships should start preparing for making tax digital for partnerships now, even though the official rollout date for MTD for Income Tax Self Assessment (ITSA) has been postponed with no confirmed new date.

Getting ready early will make it easier to comply once making tax digital partnerships rules become mandatory.

Key preparation steps for partnerships include:

• • Use HMRC-recognised MTD-compatible tools for digital record-keeping.
  • Ensure bookkeeping is accurate, complete, and ready for digital submission.
  • Monitor announcements to stay updated on making tax digital partnerships and be ready for registration and compliance when required.

How Partnerships Can Get Ready for MTD

Here’s a checklist to help your partnership prepare for making tax digital and stay ahead of upcoming requirements:

1. Check your income level: Confirm if your partnership’s qualifying income exceeds HMRC’s threshold (currently £50,000) for the earliest compliance wave under the Making Tax Digital Partnerships Rules.
2. Appoint a nominated partner: Designate a partner responsible for managing MTD compliance, including digital records and submissions.
3. Select MTD-compatible software: Research and trial HMRC-recognised accounting software to ensure it meets your partnership’s needs.
4. Switch to digital record keeping: Begin recording all transactions digitally with your chosen software to get familiar with the process.
5. Practice quarterly updates: Submit trial quarterly figures before mandatory compliance to understand timing and workflow.
6. Stay informed: Keep up to date with HMRC announcements and changes related to making tax digital partnerships, and consult regularly with your accountant.

Conclusion

Making tax rules are changing, and Making Tax Digital for partnerships is expected to be introduced. Although Making Tax Digital partnerships rules are not yet mandatory, waiting for confirmation could leave your partnership unprepared.

Starting early with digital records and software gives you a clear advantage. Those who act now will avoid last-minute stress, reduce compliance risks, and transition smoothly when the rules come into force.

Note: This blog is for general informational purposes only and does not constitute professional accounting advice. For specific guidance, please consult a qualified accountant.

Frequently Asked Questions

1. Will MTD for Income Tax affect all types of partnerships?
Ans: Yes. However, general partnerships are the likely first group, with LLPs and other complex partnerships following later once the timeline is announced.

2. Will MTD apply if my partnership is not VAT registered?
Ans: Yes, but only when MTD for Income Tax is introduced for partnerships. MTD for VAT applies only to VAT-registered businesses, including partnerships. MTD for Income Tax will eventually apply to qualifying partnerships, regardless of VAT status.

3. What’s the threshold for MTD for partnerships?
Ans: Threshold details for partnerships are expected to mirror the self-employment thresholds (£50,000, decreasing to £30,000 and then potentially £20,000 by future dates), but this has not been definitively confirmed by HMRC yet.

4. Can partnerships volunteer for MTD before it’s compulsory?
Ans: Yes, partnerships can choose to sign up early and start using MTD voluntarily, beneficial for those wanting to get ahead of potential admin and compliance issues.