SALF930 - Self Assessment: the legal framework: Overview and legislation: Who does Making Tax Digital apply to?
Subject to exclusions set out below, MTD applies to a “relevant person”. A relevant person is a person who is carrying on or has carried on a “relevant activity”.
A relevant activity in relation to a person is any activity which may give rise to profits or other income from the following and which the person would be liable to income tax chargeable under Part 2 or Part 3 of ITTOIA 2005 if the person were UK resident:
- a trade, profession or vocation (Part 2 of ITTOIA 2005)
- a property business (Part 3 of ITTOIA 2005), or
- any activity which may give rise to profits or other income chargeable to income tax (Part 2 or 3 of ITTOIA 2005)
The following are not relevant activities:
- any activity carried on in Partnership
- any activity carried on by the trustees of a charitable trust, or the trustees of an exempt unauthorised unit trust
- the underwriting business of a member of Lloyd's
- holding shares in respect of which a distribution may be made which is chargeable to income tax
- participating in an open-ended investment company which may make distributions chargeable to income tax
‘Business’ for a relevant person or partnership is defined as:
- For a relevant person - as the relevant activity or activities that a person is carrying on or has carried on.
- For a partnership - as any activity or activities of the partnership that may give rise to profits or income that do not fall with those mentioned below
- the underwriting business of a Lloyd's partnership (as defined in section 184(1) of the Finance Act 1993);
- holding shares in respect of which a distribution may be made which is chargeable to income tax under Part 3 of ITTOIA 2005 by virtue of section 548(6) of CTA 2010 (distributions to shareholders in real estate investment trusts)
- participating in an open-ended investment company which may make distributions chargeable to income tax under Part 3 of ITTOIA 2005 by virtue of regulation 69Z18 of the Authorised Investment Funds (Tax) Regulations 2006 (S.I. 2006/964) (property income distributions).
“Trustee” includes an executor or an administrator liable to tax under s.74(1) TMA 1970.