Making Tax Digital

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Time for Trump to launch a torpedo at the MTD4IT ship/raft/rubber ring and take out seemingly the one thing Keir has not U-turned on.....yet!

By FactChecker
06th Mar 2026 17:52
"What happens if the first SA return is not completed until 31 January? Does the business then have to backdate its MTD ITSA start to the previous 6 April?" ...

... No.

Whether this rule turns out to be permanent (or as transient as most of the MTD IT guidance), it's currently (reasonably) clear that:
- the QI from first SA return (due by/before 31 Jan of year XX) is used to determine whether the registration threshold has been breached;
- and, if it has, the taxpayer must register for MTD IT by/before 6th April of year XX.

[so, your 2028-29 SA return will determine whether or not you need to register for MTD IT for the 2030-31 TY - presumably based on whatever threshold is then in place]

Basically, until SA is somehow fully replaced by MTD IT, the requirement to be in MTD is driven solely by the QI from a combination of self-employment and property rentals - a figure which can't be known until after the end of the TY (and, as you say, often nearly 10 months after that TY end).
So without a drastic change (such as 'any taxpayer with ANY gross income from self-employment and/or property rentals must immediately register for MTD IT') ... they are stuck (as in hoist by their own stupidity).

This is what happens when mandarins have a great vision that not only isn't under-pinned by practical details, but is slowly but surely eviscerated pre-launch (no CT .. no partnerships .. bridging software allowed .. and so on).
All the effort is now going into trying to keep the raft afloat, despite the planned ship never having been built and the various ports/jetties no longer having a purpose.

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Not an once of arrogance or self importance contained in this reply...something the twats introducing MTD4IT should take on board. I'd replace them all with KR in a heartbeat.

By kevinringer
06th Mar 2026 10:47
I've been in practice since before SA and during that time I've submitted thousands of Tax Returns, yet I still regularly encounter SA questions that I don't know the answer to so have to find the answer. Sometimes I phone HMRC and they can't answer either even though they created SA. After 25+ years of operation during which time perhaps 200+ million Tax Returns have been submitted, there are still times I don't know the answer. MTD hasn't even started yet, and none of us have practical experience of MTD outside of the pilot, and MTD is much more complex than SA, so there's going to be vastly more questions about MTD than there were about SA. When SA started, HMRC launched Working Together and held workshops and meetings locally, and gave us printed documents (who remembers SAT1 and SAT2 - I've still got mine), and HMRC allocated a local member of staff as our liaison officer, and gave us her direct phone line. HMRC gave us the support we needed to transition to SA. Despite MTD being bigger than SA, HMRC has given much less support, yet we have more questions. AccountingWeb is one of my prime sources of practical information: practical issues being raised by practitioners who will be dealing with the lion's share of MTD moving forward. Despite my decades of experience dealing with tax, I did not know the answer to OP's question and was glad it was raised, and glad to read answers and other practitioner's views. Given how new MTD is, I would expect most accountants would not know the answer to OP's question, and that 99% of taxpayers would not know the answer either, and I dare say many HMRC staff themselves wouldn't know the answer without looking it up. As we start dealing with the practicalities of MTD, we're all going to have questions we don't know the answer to, because this is new to all of us.

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By EasyMTD
06th Mar 2026 13:32
Not only has there been a lack of information from HMRC there has been no clarity in some of the information provided. This certainly rings true with the documentation provided to software developers who have been tasked with producing MTD for Income Tax solutions. Some of the documentation is very vague, almost like the person writing it didn't really know the exact answer so they wrote it in a way that could be interpreted multiple ways - so at least one assumption is factually correct.
And its not just the documentation. The test data provided by HMRC is horrendous. You guys would laugh at the data we are expected to test our software with in the sandbox environment.[/color]

[etf]

This is insane!

Using the lyrics of the 1980s Orange Juice song, 'Rip it up and start again'.

But what a mess.
* someone may be embroiled in MTD IT because of the QI in their 2024-25 SA return, even though in Jan 2026 they moved into full-time PAYE employment, IF they haven't completely ceased the QI-generating business prior to 6 April 2026;
* even if their QI-income is now diluted to below the threshold for it being taxable, they will remain in MTD IT for 3 years (2026-27, 2027-28, 2028-29);
* if they then tire of being an employee and revert to making a living through being self-employed from 6th April 2029, then they will have to report those earnings via SA for 2029-30 and 2030-31 ... and only re-enter MTD IT in 2031-32!

So they are ... 'in' MTD IT for 3 years (when their QI was > £1 but non-taxable) + then 'in' SA for 2 years (when their QI was well above the MTD threshold) ... ?

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1722401

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If I'm understanding the rules correctly, say £50 self employment income in each of 2026/27, 2027/28, 2028/29 = a requirement to make 15 (3 x 5) returns in MTD4IT because the taxpayer's self employment income was higher in 2024/25.

Who could have dreamt up such an insane, irrational, crazy, unbelievable set of rules? Mmmmm...Tories/Labour nudged by tax software companies perhaps? Why report for one year when these software companies can triple their profits by making the reporting requirement last three years?

How many times have Labour wheeled out MP Murray on TV and how many times have the limp, wet lettuce TV interviewers asked him about his 'thorough interrogation' of HMRC and MTD4IT?

Using Annie Lennox's 1990s hit song title.....'Why'?

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In my example above, presumably the MTD4IT tax software costs will exceed the self employment income received in those 3 years....Labour encouraging entrepreneurs to go out and work to make a loss?

Interesting too that the tax software companies have been excluded from MTD.....Labour bashing the little people!

[etf]

In my example above, presumably the MTD4IT tax software costs will exceed the self employment income received in those 3 years....Labour encouraging entrepreneurs to go out and work to make a loss?

Interesting too that the tax software companies have been excluded from MTD.....Labour bashing the little people!

[etf]

Sorry, double post, but perhaps worth saying twice. Is this Labour confirming work doesn't pay?

In my example above, presumably the MTD4IT tax software costs will exceed the self employment income received in those 3 years....Labour encouraging entrepreneurs to go out and work to make a loss?

Interesting too that the tax software companies have been excluded from MTD.....Labour bashing the little people!

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If the smash potato aliens were reviewing MTD4IT:

- the Labour Government is introducing a new reporting system for the self employed and landlords at huge cost even though the existing self assessment system works well (and the Country is broke).
- taxpayers may have to pay for tax software which was previously free.
- taxpayers will have to submit at least 5 returns a year instead of 1.
- the cost of the tax software could exceed the income the taxpayer has to report.
- taxpayers will have to submit MTD4IT returns for three years even where their continuing self employment/property income is minimal in each of those years.
- very few people fully understand the tax reporting rules and tax software developers have confirmed that includes HMRC.
- taxpayers who have been hit by software costs could on top face penalties.
- the Labour Government and HMRC think the new system will benefit those caught up in the red tape.

Sound of aliens splitting their sides with laughter.
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