Making Tax Digital

[etf]

By gillsoffice
16th Jan 2026 18:06
I attended a webinar on Wednesday which involved a bloke from HMRC giving us further info about MTD and how to comply (thought I'd take a break from the tax returns for a bit of a giggle).
He seemed very relaxed about the info needed for the 1/4ly returns & final submission:
- you can record only basic info about the income/expense (but bear in mind you might want to record a bit more info IF you want to categorise it later on).
- if you've got a payment which is part capital and part p&l, no worries, just enter whatever you want
- if we don't get all of the info in time from our clients, then just file what you've got & catch up next 1/4 if you can, it doesn't matter.
- cash v accruals- doesn't matter, do whatever you want to do
- gross income - very simple according to him, just enter what you receive from self employment/rent & sort out at year end.
- at year end it will be easy to complete the final tax return. HMRC will pre-populate it with your paye income/pensions/benefits - hmmm we'll see how that goes!
- age, according to him, is no reason you can't comply, it's so easy. People in their 80s can be tech savvy as well as 20 year olds who aren't. Whilst this is true, I think someone who is in their 20s will have a smart phone/tablet and the energy to wade through all this garbage and learn what they need to do, while an 80 year old may probably not.
He was more concerned that you sign up and file something (anything!) on time so that you don't get fined. Then they can tick their boxes that it's a successful system and/or make a bit of money in fines if you don't comply. He then shuffled off screen as he had to do the school run.
As standard with these webinars you could submit questions - I think he said he'd got over 100 (& the attendees were mainly accountants or advisors). Funnily enough he didn't answer mine, which were,
What is the point?
What do HMRC aim to do with all of this data (which they are happy may well be rubbish)
Why create another tax return tier when Self Assessment works well, most of the time.

It seems that all of the high standards we set ourselves as accountants are being undermined from all angles. I'm wondering if it's even worth staying in my PB when they charge me £100s and will make me adhere to stricter rules than HMRC.


Replying to gillsoffice:

By FactChecker
16th Jan 2026 19:34
Not only are the bulk of those responses inconsistent with the official HMRC line, but:
"He was more concerned that you sign up and file something (anything!) on time so that you don't get fined" is simply WRONG!

[he may not even, by the sound of it, have understood the difference between the filing of QUs and submitting your annual tax return ... but there will be NO fines for any QUs that are filed late - at least in 2026-27]

Out of interest ... what, if anything was the "further info about MTD" he imparted?
Oh, and is a recording of that webinar available/shareable (there's useful ammo in there)!


Replying to gillsoffice:
Tornado
By Tornado
16th Jan 2026 21:31
It is truly bizarre.

It does not matter what you files long as you file something (so that we can say that people are using the system).

I would rather not file anything than file rubbish.

What a disgraceful way to behave.

[Dollyartasia8800]

ChatGPT CONFIRMS MTD is going to be bloody expensive for business...especially for smaller operators.


Why is making tax digital going to be expensive for business?

ChatGPT said:
Making Tax Digital (MTD) is an initiative by the UK government aimed at making the tax system more efficient by digitizing and automating the process. While MTD has some long-term benefits, it can be expensive for businesses, especially in the short term. Here are a few reasons why:

Software Costs: Businesses are required to use HMRC-approved software to file taxes. For many businesses, this means upgrading their existing systems or purchasing new software. These software solutions often come with monthly or annual subscription fees, adding ongoing costs to business operations.

Training and Skills Development: Employees may need training to use new digital tools and understand the updated process. This training can be time-consuming and costly, particularly for smaller businesses that might not have the resources to dedicate to staff education.

Implementation Costs: For businesses with complex financial systems, integrating new digital tax reporting systems can require significant changes. These changes might include updates to their accounting processes, IT infrastructure, or even hiring external consultants, all of which incur additional costs.

Ongoing Compliance: MTD requires more frequent reporting, sometimes quarterly instead of annually. This could lead to increased accounting and administrative workload, requiring businesses to hire more staff or pay for additional accounting services to stay compliant.

Data Security and Infrastructure Upgrades: With more business financial data being stored and processed digitally, there’s a need for enhanced cybersecurity measures. This might involve upgrading IT systems to protect sensitive tax data, which comes with its own costs.

Small Business Burden: Smaller businesses with fewer resources may find it particularly difficult to keep up with the transition. The costs of complying with MTD might disproportionately impact them compared to larger companies that already have digital systems in place.

Penalties for Non-Compliance: If businesses fail to comply with the new requirements, they may face fines and penalties. This creates additional financial pressure as businesses must ensure they remain compliant to avoid these costs.

Overall, while MTD may streamline processes and reduce errors in the long run, the initial costs of transitioning, maintaining compliance, and ongoing operation can add up significantly for businesses.

I agree with most of this. For a lot of small businesses the biggest issue isn’t the idea of MTD itself, it’s the forced move to paid software and more frequent reporting. If you were already digital it’s manageable, but if not, the costs and extra admin time can feel disproportionate, at least in the early years.

[Lambs]

Well, it is a relief (of sorts) that the great Chat-GPT is able to regurgitate observations that have been made by the profession for roughly the last decade.

Regards All,

Lambs

[etf]

Stop ruining my echo chamber you two:

My conclusion is we are ruled and managed by idiots who are clueless about the real world. It is so obvious that if they are going to introduce it, the VAT threshold should have been a starting point. That would not however generate enough dosh for the software companies.

[etf]

Yes, in the early stages of the Making Tax Digital (MTD) program (around 2015–2016), HMRC stated that MTD would not cost taxpayers anything, largely by claiming that "free software" would be available for businesses with straightforward affairs.
However, subsequent analysis, reports, and the evolution of the policy have shown this to be inaccurate for many, with substantial, long-term costs now expected.

The above demonstrates how clueless and untrustworthy HMRC have become. And our monarchs keep knighting those responsible.

[etf]

What has MTD4IT got in common with Peter Mandelson?

Sir Keir has been advised they will both be a disaster.

[etf]

Mandy Takes Data 4 Improper Time.

MTD4IT is pants!

Associate that image everytime this new tax system is mentioned.

[etf]

Nobody regulating HMRC means a lawless Wild West....The Taxpayers Charter.....how is MTD4IT being entertained given the text in red below?

By Ben Alligin
05th Feb 2026 10:09
I love the veiled threat that taxpayers have a legal obligation to file quarterly updates in 2026/27.

Can I also point out the HMRC have a legal obligation under the HMRC Charter Act 2005 to provide the following :

"We’ll give you accurate, consistent and clear information."

"Making things easy. We’ll provide services that are designed around what you need to do, and are accessible, easy and quick to use, minimising the cost to you."

Those are direct quotes from the Charter, with no intended hint of irony.

After 21 years of declining services and invariably incorrect advice when you speak to the ADL, and now MTD-Rubbish, they seem to have missed all their aspirations and standards that we are legally entitled to expect from them.

As they say on Dragons Den, .... and for that reason I am out.

[etf]

If Angela suceeds Sir Keir, I imagine she will be looking to simplify the tax code .....before Nigel potentially replaces her...either way MTD4IT does not look like a long term project (other than in the planning phase). If it is introduced, it will progressively alienate more and more of the voting population for pain in the backside/cost reasons...not a good idea for Political Parties looking to win an election.

By Tornado
05th Feb 2026 21:47
Perhaps the end of the cycle is nigh and the new cycle just about to begin.

Reform are the party to do away with MTD, raise the VAT Registration Limit to £180,000, end IR35 and ensure that people only start paying tax when their income is £20,000 or over and as the political party with the most paid up members at the moment, no wonder they are riding high in the polls.

It may be hype but the current Government are clearly rattled and the former Government are near extinction. We are perhaps witnessing a desperate attempt by the current Government (or is it the Civil Service) to get MTD going at whatever cost which would make it harder to remove.

The reason we live in a democracy is that we elect people to work for us and do what we want them to do but increasingly we are being told what to do by Governments that think they know better than us under pain of punishment if we do not.

There is a limit as to what people will put up with and we are very near to that limit.

As an example, we did not ask for MTD which is pointless project that is purely the creation of successive Governments that think they know better than us and I don't believe the 'People' will comply, even under threats of punishment.

Whatever your opinion of Reform UK, they are popular as they are promising to do what the people want, and that will be more than be enough for them to be elected, perhaps sooner than expected.

Goodbye MTD and all the other things that we did not ask for and do not want.

[etf]

Angela likes the following post...tax simplification not complication.

Let us hope it was just Morgan who was championing MTD4IT.

By kevinringer
09th Feb 2026 11:28
It's not too late for HMRC to face up to the fact that even after 10 years, HMRC are still not ready for MTD, and that all the problems we pointed out to HMRC in the consultations 10 years ago are real. Income tax is already complex enough with HMRC failing to link PAYE and SA. Given that millions of taxpayers will remain in PAYE and/or SA, what is the point of introducing a third tax reporting regime that will only apply to a subset of SA cases?