Making Tax Digital

[etf]

A good start to 2026...well this thread made me smile...much more of this to come Labour...how much are you paying your advisers because they are crap!:

How do we stop MTDIT

I finally got a letter published in The Times yesterday criticising the governments imminent plans for MTD. I also looked separately at Estonia generally recognised as having the most advanced digital and IT tax system in Europe. I found they only require one annual digital tax return which takes minutes to file. Why on earth our stupid government is insisting on 6 filings a year (4 quarterly and 2 at year end) is utterly beyond me. Yet another totally unnecessary burden on industry and taxpayers and even accountants who, along with software providers, are the only conceivable beneficiaries seem almost unanimously against it. How on earth has this been allowed to get this far?

By Jo Nokes
02nd Jan 2026 10:36
I read your letter in The Times, and of course, I agree with the sentiments expressed. But I don't think it will gain much traction there. I wonder if a letter in the Daily Mail might produce a larger reaction? It seems that this is just too technical for most people to grasp, and perhaps they haven't cottoned on to the extra cost that software will necessitate. On the other hand, we as accountants are concerned about the extra work and how to to fit it all in. Maybe your average unrepresented tax payer will just do it on a spreadsheet and be entirely unconcerned about getting it right. Why worry?

Replying to Jo Nokes:

By AdamJones82
02nd Jan 2026 11:02
You'll only get a letter published in the Mail if you write about boats, it appeals to their audience.

Replying to AdamJones82:

By Rob Swan
02nd Jan 2026 11:15
Headline: "MTD is HMRC's sinking ship." (or similar).

Sorry. I'll get get my coat.

[etf]

Robyn Milstead highlights how self-employed universal credit claimants could face dual reporting under MTD, potentially resulting in 17 submissions per year. With no exemption in HMRC’s latest guidance, she questions why it's been left unaddressed.

5th Jan 2026
5 comments

[etf]

James 'thorough interrogation' Murray in the frame again! He has tried to rush things through and this will backfire.

Back in July, I had the opportunity to meet James Murray MP and to hand him a letter signed by hundreds of professionals from the Accountants Therapy community. That letter called for a number of easements to Making Tax Digital for income tax (MTD), including a specific request to consider an exemption for those claiming universal credit.

What does his reporting position now look like?

Under universal credit, Mr Trade must submit a monthly income and expense report for each assessment period running from the 15th to the 14th of the following month. Each report is due within 14 days of the period end. That’s 12 reports a year, due around the 30th of each month from May 2026 onwards.

Under MTD, Mr Trade must submit four quarterly updates, plus his final tax return, in addition to obtaining and maintaining compatible software.

That’s five additional reports.

In total, Mr Trade is now required to submit 17 reports every year for his one sole trade.

On average, that means a new report every three weeks.

Unless the universal credit assessment periods happen to align neatly with the tax year, or with the calendar year if such an election has been made, each of these reporting obligations will be entirely disconnected from the others.

To complicate matters further, universal credit reporting rules do not fully align with tax rules, even for taxpayers using the cash basis.

[etf]

By Mr J Andrews
06th Jan 2026 15:05
Interesting opening - handing of the representation to Mr Murray half a year ago. It looks as though the opportunity could have been just as productive as handing it to Mr Bean. Probably it helped the so called ''Further Guidance'' propaganda published in December.
The legislation is quite clear. Exemptions under paragraph [14]{4}(b) state that....for ANY reason, it is not reasonably practical........a person should be digitally excluded.
However it is patently obvious that Middle Management Ogilvie's team are hell bent on getting all and sundry within the scope of MTD, irrespective of legislation. Pressure from above dictates.
Anyone facing the prospect of 17 submissions - clearly at considerable, time wasting administration - to no personal advantage whatsoever - nor to the Ogilvie Light Brigade - should claim Exemption. Once the AUTOMATIC DISAGREEMENT decision is made by HMRC by means of their standard internal doctrinated training, the next step is to appeal.
Refer then to have the matter reviewed by an {alleged} impartial officer - who works for HMRC Legal Group - which should be quick and at little cost. Alternitively [ or for the hell of it , why not both ?] take the appeal to Tribunal.
The sad thing about this latest Ogilvie farce is that HMRC staff realise what constitutes REASONABLY PRACTICAL but they have to pretend otherwise and go along with the ride.
{ Just had one automatic disagreement, by the way, on the grounds that client has an email address - therefore possessing digital capability. Client's response was that there are countless more email than postal addresses in the UK and if the logical conclusion of HMRC's wisdom is followed, everyone with an email address is so capable . I don't think so ! Furthermore the same client pointed out that the postal system is much more user friendly as many institutions can't be contacted by - or naturally respond to - emails. She quoted HMRC as a classic example of not being capable.
Meanwhile the U.K. Black Economy flourishes.

[etf]

Seems a crossing on the Titanic might be a safer bet.

By FactChecker
07th Jan 2026 20:34

I guess that HMRC are not the only people running scared of that moment next April, when HMS 'MTD IT' is launched into calm waters ... but is found not to be seaworthy.

Presumably on the basis that software companies are equally nervous (albeit for entirely different reasons*), the latest Aweb "special editorial report in association with Xero" - "A new era: MTD IT and the journey to digital taxation" - has just been published at https://www.accountingweb.co.uk/tax/personal-tax/a-new-era-mtd-it-and-th... ...
... but "with the comments switched off"!

I sort of promised Jake not to keep attacking sponsored articles, but frankly the claims made in there by Craig speak for themselves - although presumably not as he intended.

[* = the different reasons for nerves within software houses (when they're allowed to speak off the record) are predominantly in two basic areas:
- going live before every element has been fully specified/tied-down (let alone tested);
- being clearly expected by HMRC (despite their software T&Cs) to provide user support.]


Replying to FactChecker:

By Tornado
07th Jan 2026 23:07
I was trying to say nothing more about this continuing shambles but as you imply, and at the risk of stating the obvious, it is quite clear that only those with vested interests think this is a great project. It is quite natural I guess, but it is so obvious now that a few people and organisations are making themselves look a tad bit silly.

[etf]

Yikes!

MTD Registration
6th Jan 2026

My client has received a letter from HMRC: "You'll need to use MTD from 6 April 2026 as your total income was over £50,000 ...in your 20024/25 Tax Return".

In fact the income on the Return was under £20,000.

It looks HMRC are going to be super-efficient with this exciting new project!

[etf]

I don't pretend to understand all of the content below, but it does sound like 'Houston we have a problem'....'mangles...data'...yikes! Did MP Murray's 'thorough interrogation uncover this problem?

By NotAnAccountant2
13th Jan 2026 09:10
Some of you might have become aware over the years that I've been working on MTD software. Might come as a surprise to most as I don't talk about MTD much

I'm just about getting to the point now where I need to work out what I need to do to get it approved by HMRC so I can have production credentials. As the first step this will be the absolute minimum I can get away with - haven't quite worked out yet whether you can have an in-year property income only product, but if I can get away with it that's what I'll aim to have live before the end of the 2026-27 tax year. (No rush for me - I don't expect to have to do YE MTD stuff until 31 Jan 2030)

But one thing I do now need is to know where the definitive API definition is. There are three that I know off, all with differences. Up until now I've been able to use the API in github for my testing, it's close enough and gives me early insight into what changes are coming.

There's a second version that is used to drive the website documentation. This isn't officially linked (that I know of), but if you know where the top document can be found you can then find the rest. The problem with this version is that the software that renders the website mangles some things from the underlying data.

There's a third version via the "download API" link on every version of every API.

Their reply to me about the definitive API was a bit vague but I think they were referring to the downloadable version (the third one above). However, they're pretty much all wrong. someone (not me) opened an issue about this here: https://github.com/hmrc/income-tax-mtd-changelog/issues/318

and a year later there's no change but we're still being told that it's the official api!

The agent-authorisation-api is defective - if you're using software to authorise clients for MTD (including MTD-VAT) then your software does NOT comply with the HMRC specification for doing this, because if it did it wouldn't work! (I think you can also authorise clients via alternative routes)

PS found out yesterday you can request a knighthood...who knew...my application to Sir Keir is in the post.

[etf]

Do we need to drug test those in charge of MTD4IT because it is becoming a laughing stock?

By Justin Bryant
13th Jan 2026 16:58
If you were tasked with inventing the most insanely mad tax idea ever (and that's a tall order), you would be hard-pressed beating MTD in my view.

By Trethi Teg
13th Jan 2026 18:13
Hopefully our totally useless government will realise what is going on - fat chance - and scrap it as an example of how its helping business grow.

This would be ironic - a moronic system set up over 10 years by morons finally scrapped by - morons.

[etf]

MTD4IT-Now known as the Data mangler

13 Labour U-turns and MTD4IT still not included.

Wes Streeting-'Labour must stop U-turning'....well Wes, if your party listened a little more....but not to Companies hoping to make a killing, Labour would not have to make these damaging handbrake turns and save a few billions too.

[etf]

What have Robert Jenrick and MTD4IT got in common?

Ambition over substance.

In further news, there is a rumour circulating that the Labour Party are signing Mystic Meg to help identify policies likely to blow up in their face going forward. I have a picture of Labour's policy team including Harry Enfield's 'nice but dim' character (and I've not researched the nice component).