Making Tax Digital

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Emma and Robyn do not appear confident that system failures are in the past.

Testing Requirement: Lord Carter recommended testing all mandatory online services at anticipated peak capacity 12 months before going live to avoid the system failures seen in previous HMRC IT projects.

What happens if software testing throws up errors?
Emma Rawson: Don’t panic when it comes to issues which appeared during testing. If everything worked perfectly, we wouldn’t have needed testing. This was the period when problems needed to surface so they could be addressed before mandation. If problems continue to arise now we have gone live, remember there are no penalties, or penalty points, for late submission of quarterly updates during 2026/27.

Robyn Milstead: Accountants Therapy has tracked unsuccessful submissions through freedom of information requests. Some submissions fail, but many go through successfully the next time. At the moment, because there is no consequence to giving up during testing, it is hard to know whether some failures are true system problems or whether people simply decide they have spent enough time on it.

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Prompt letters on MTD from HMRC
We have clients that are part of MTD in this current tax year HMRC still haven't notified them

By FactChecker
09th Jun 2026 18:10
It's probably just HMRC incompetence (it usually is) - but is it possible that you've struck 'lucky' and several/most of your clients whom you assumed would be mandated for 26/27 are actually exempted?

Have you read all the way through https://www.gov.uk/guidance/find-out-if-you-can-get-an-exemption-from-ma... ?

Despite the title suggesting the page is for those seeking to be exempted, there are a surprising number of scenarios where:
- Automatic Exemptions apply (some permanent, some until further notice and some just for 26/27).
In those cases, HMRC's system is supposed to prevent the taxpayer from registering (even if they or you try) ... so this could be a rare case of HMRC competence, where they don't issue the nudge letters to those that can't actually register right now?

But I agree, their frequency & consistency of 'messaging' to taxpayers is arguably even worse than their communications to developers and agents (which is saying something)!

EDIT: rmillaree is of course sadly correct (sadly because it shouldn't be necessary) that the only safe option is to go online and check each client, one at a time!

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Britain’s debt rising at fastest rate in the world – bar Botswana
Fears mount of brewing crisis as national debt rockets 65pc over last 25 years

Replacing a tax reporting system that broadly has worked well for decades (self assessment) with a hugely expensive pain in the **** system that offers little benefit (MTD4IT) shows the level of ****wits in charge (IMHO).

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MTD4IT spending v Defence spending

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Whether Making Tax Digital for Income Tax Self-Assessment (MTD4IT or MTD ITSA) is considered a "fiasco" is a subject of intense debate, with many tax professionals, accountants, and small business owners expressing significant concern and frustration as the April 2026 launch approaches.

Arguments for the "Fiasco" Perspective:

Massive Cost Overruns: A 2023 National Audit Office (NAO) report revealed the project cost the government five times the original forecast, jumping from £226 million to £1.3 billion.
Increased Administrative Burden: Critics argue that moving from one annual return to four quarterly updates plus a final declaration is a major burden, especially for small businesses, forcing them to use commercial software.
Unclear Benefits: Some tax professionals reported seeing no improvement in accuracy or productivity, and some analysis suggests that the tax revenue generated will be minimal compared to the costs.
Software Limitations: Many approved software options do not support all self-assessment features, forcing users to pay for, in some cases, inferior solutions.
Technical Glitches: Early testing has revealed flaws, such as a glitch where choosing the wrong start year (2026/27 instead of 2025/26) in the sign-up process can lock users out of testing, according to a user in AccountingWEB.
Widespread Opposition: Many in the accounting profession feel the project is "fundamentally flawed" and feel the government is ignoring professional

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By FactChecker
15th Jun 2026 19:42
"Time and again, practitioners encounter small inconsistencies that make the system feel disconnected. Individually, each one appears minor. Collectively, they chip away at confidence and create uncertainty about how the various parts of the programme fit together."

Replace the word 'practitioners' with 'HMRC staff' ... and all 3 sentences remain on the money!

I think I've missed the reason that Robyn thinks this specific aspect is so important .... BUT it is without doubt yet *another* example of a project without a complete specification OR any sense of pre-planning (contingency etc) OR indeed a single, cohesive 'guiding light' from the top.

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By GHarr497688
15th Jun 2026 20:41
Having retired, I am very happy not to be part of this game anymore.
Back in 2015, when Making Tax Digital was first announced, I said it would not work in the form being proposed. I spoke to my local MP at the time, who described it as a ludicrous idea. I also raised concerns with the MTD Readiness Team, only to be told that I was out of date and should go to night school to learn about computers.
That was quite amusing, considering I was one of the first firms in my area to embrace computerisation and was actively involved with the introduction of Self Assessment back in 1996.
Many of us who questioned MTD were not anti-technology. We simply understood the realities faced by small businesses, landlords and accountants. The problem was never digitalisation itself; it was the way the scheme was designed.
Now, after years of delays, revisions and changing deadlines, there seems to be growing concern within government that MTD may never deliver what was originally promised. Rather than a headline-grabbing failure, I suspect it will simply be scaled back and quietly fade away, much like other overhyped schemes of the past such as HIPs.
Some of us said this from the beginning.
MTD = Making Tax Dead.

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By FactChecker
15th Jun 2026 19:56
I'm puzzled ... particularly in the light of one of your quick, throwaway remarks above:
"MTD testing numbers remain relatively small".

I agree that the numbers who went through testing last year were ludicrously small - particularly if you only count those who completed the full TY cycle (not just one or two QUs); AND again agree that there were so many limitations (some imposed by HMRC and some, like above, due merely to uncertainties) that any 'conclusions' wouldn't pass muster if reviewed by a professional statistician as an indication of the 'fitness for purpose' of the project.

And yet ... HMRC are talking the whole thing up as simply "it's gone live" - with an inference that the 'testing phase' is over (with misplaced confidence that only minor wrinkles will be uncovered during live use - which will no doubt be fixed agilely on the fly)!

I had naively assumed therefore that there was NO formal 'testing' option now - just the option for a taxpayer (with or without the help of an agent) to 'volunteer early' (i.e. before they are mandated).
[I've not even investigated whether such a person then picks up *all* MTD IT liabilities (and even penalties), let alone how they would be expected eventually to file a TR]

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Are HMRC being open and transparent about the current state of the MTD4IT project?

By Taxaider
16th Jun 2026 08:55
This sums up the problem with MTD nonsense perfectly. Agents were told Government Gateway filing wouldn't be available, changed processes, removed clients from testing and wasted valuable time. Now we discover the Gateway still works for testers.
If HMRC can't clearly explain why a long-established filing route needs replacing, people will inevitably question the whole exercise. Stability matters. Changing systems for the sake of change isn't modernisation.

Rob Swan
16th Jun 2026 14:13

MTD will NEVER work - IMHO - for all the points you make. Over ambitious, sold as 'A' to fix problems 'B, C and D', and a bunch of idiots with no clue in the top jobs with no actual accountability.

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By North East Accountant
16th Jun 2026 09:51
HMRC's Plan B?

The SA system needs to keep going for many, many years yet so perhaps whilst HMRC say you can't use SA once in you're in MTD, it might be like all the launch dates....just hot air.