Making Tax Digital

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Labour isn't working (again!)

By Crouchy
15th May 2026 09:27
Today I'm meeting with a lovely husband and wife client, they have a property porfolio and keep immaculate records - all hand written and in the same format for the last 30 years

I've got to explain to them that this isnt acceptable anymore and that they now need to keep records digitally - not only that, but as a property business, they now need to keep the records twice!, once for Mr's share and once for Mrs's share

is this progress, is this going to improve their record keeping, not all , it will make a simple task harder and increase the likelyhod of errors

slow hand clap for HMRC for bringing in this guff and ignoring an entire profession for 10 years to do it.

hopefully the project fails, but i expect this wont happen until years 2-3 of the rollout when the smaller taxpayers, who really will see no benefit from MTD come in play.

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If the below is a correct, how did the new Health Secretary determine it was worth proceeding?

By ireallyshouldknowthisbut
18th May 2026 11:20
Tracey Crewdson wrote:
The cost to design and implement MTD ITSA is showing at around £1.4billion. How long to break even?!

There are no benefits, only increased cost for everyone.
HMRC to run this, and deal with the admin
HMRC to pay for ongoing software costs
Tax payers to comply
Agents to spend time learning and runing the new system

The only one to benefit is the software co's, and arguably some accountants who are chasing revenue and dont give a stuff about anything else.

Its a very rare example of a project with literally *no* return. HMRC's will be negative from a running it/tax loss point of view, given the level of non-compliance will only cut the tax take and force more people outside the system, and for those of them inside it mashing fingers at software, they will tend to overclaim expenses, and so less tax paid. Its "lose, lose, lose" for HMRC.

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MP Murray already stuck in a huge MTD4IT hole and then this boulder arrives on his head:

Replying to ireallyshouldknowthisbut:

By NotAnAccountant2
18th May 2026 11:53
ireallyshouldknowthisbut wrote:
Its a very rare example of a project with literally *no* return. HMRC's will be negative from a running it/tax loss point of view, given the level of non-compliance will only cut the tax take and force more people outside the system, and for those of them inside it mashing fingers at software, they will tend to overclaim expenses, and so less tax paid. Its "lose, lose, lose" for HMRC.

I think it's even worse than that. I don't know how to find my old posts on here but I summarized this a while ago.

HMRC need a big overhaul of their legacy systems. Selling that to the people who control the purse strings is almost impossible.

So HMRC invented MTD as a way to sneak a major infrastructure overhaul. So far, so good, this is, sadly, the way these things are often done.

However, they didn't plan it at all well. They thought the MTD bit of it would be easy (quarterly updates when disconnected from everything else are easy) but discovered that even quarterly updates come with pain points once you pretend they have a point (hence why we've gone from four quarterly submissions to a cumulative submission four times a year which removes three out of the four pain points... but doesn't actually solve anything!).

Then things really started to go wrong - the project was getting further and further behind the plan and burning more and more money without actually delivering either the "cover plan" or the "real plan". It reached the point where "something must be delivered" and suddenly, all of the tax return became a parallel interface into the legacy system. Obviously I have no insight into the underlying systems but my guess is that MTD (tax return, not quarterly updates) is already "legacy" and "in need of replacement" because the only way to get it over the line was to duplicate the existing interfaces as "new" MTD interfaces.

HMRC will now have more costs to maintain yet another legacy system. I guess they'll force everybody onto the MTD tax return eventually to save face, but it won't have moved them even one inch forward in what they really need to do, just spent a lot of money for no benefit.

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Replying to NotAnAccountant2:

By FactChecker
18th May 2026 15:15
That's a much better explanation of what I put as point 3 in my first post on this thread (page 1 of what feels like a lifetime ago but was actually 14th May 2026 23:20):

"3. the cobbling together of a new (and as yet incomplete & untested) tax return is driven by unrelated external factors (age of HMRC infrastructure / monolithic databases / lack of integration of processes or taxes) - not as a direct consequence of, let alone need of, the MTD project"

It's the dishonesty at the heart of HMRC/Treasury that get's me riled even more than the incompetence - because it is deliberate!

See CGT NRCGT thread for further evidence of this.

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The dipsticks in charge just don't get it!

By ruth.julian
21st May 2026 13:25
thank you for your succint summary of the issues. I can't be the only one with a sole trader or landlord who keeps perfectly acceptable records on paper or Excel. I have one with a Cathedral cashbook with enough pages to last 40 tax years who now needs to pay out for a laptop that they don't otherwise need, MTD software, etc, or pay me, to digitise their records that are simple, quick and accurately maintained at present. So much for not costing more in time and money.


Replying to ruth.julian:

By Southwestbeancounter
21st May 2026 16:02
ruth.julian wrote:

thank you for your succint summary of the issues. I can't be the only one with a sole trader or landlord who keeps perfectly acceptable records on paper or Excel. I have one with a Cathedral cashbook with enough pages to last 40 tax years who now needs to pay out for a laptop that they don't otherwise need, MTD software, etc, or pay me, to digitise their records that are simple, quick and accurately maintained at present. So much for not costing more in time and money.

Spot on! That describes about 3/4 of my client base too and exactly the reason why I feel MTD for IT is totally and utterly pointless!

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It is like HMRC are requiring taxpayers to complete four quarterly decathlons (with significant entrance fees) before they are able to compete in an end of season sack race.....pointless.

By Tornado
22nd May 2026 20:32
"Perhaps the answer is to take him Mr A at his word by taking incompleteness to its extreme and submit nil updates."

Or just don't submit anything at all.

It would not make any difference to the MTD Tax Return which, as professionals, we would ensure is 100% correct as usual.

The Quarterly Update crap (for that is what much of it will be) is not required at all as it is not part of the tax administration system.


By FactChecker
22nd May 2026 20:56
"Perhaps the answer is to take him Mr A at his word by taking incompleteness to its extreme and submit nil updates" = my original suggestion (before that upstart invented his poo-flicker)!

It's actually quite viable (per Athow's simplistic overview) ... after all it's hardly your fault if something in the 'digital chain' (bank feed failure all the way through to software provider failure) breaks - in which case your (not-a-tax-return) QU is correctly reporting what it can find (zero). And don't forget you're not allowed to compensate for such failures by keying the correct figures in to your QU!

[it's no good threatening the taxpayer on the grounds of maintaining inadequate digital records (pure bookkeeping not being an offence likely to be treated harshly by the courts) ... so we're back to the annual return (even if the hoops & processes are altered - for no good apparent reason)]

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Starmer...'I will not resign and plunge the country into chaos'.

Read this thread...we are already at that point. The potholes are now so bad on the way to work I have to venture into the hedgerow on the opposite side of the road to pass...the road is a potential deathtrap for cyclists and motorcyclists.

I was following a young girl on a horse yesterday from a distance. She was nearly unseated as the horse's back leg disappeared down one of the potholes I described above. These are serious road defects which Labour (and the Tories before) just seem incapable of tackling and meanwhile they carry on rolling out red tape like MTD4IT and wasting our money on projects that are far less important and unnecessary.

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And Labour in the most recent adaption of the Emperor's New Clothes just let it carry on (a bit like their leader...limping at best)


By uphillstruggle
26th May 2026 14:43
"unless the hidden plan is to introduce quarterly payments of tax in the not-too-distant future, many on the other side of the fence will continue to wonder whether all of the bother and heartache is necessary."

They don't need to spend billions on a scheme to get people to pay quarterly. They could just change the payment structure so that POAs are quarterly / monthly / whateverly.

It's a bogus waste of time on a significant amount of money that is unlikely to be made up by the alledged 'tax gap'. We're all "supposed" to go out there and sell this conveluted scheme to our clients whilst HMRC don't even care if the information is accurate.

Instead of getting something right once a year, we've now got to (maybe/maybe not) get something right (or wrong, but don't worry because we can change it later) four times a year before getting it right.

HMRC still can't justifiably say what the actual [INSERT CHOICE OF EXPLETIVE HERE] point is of it all.

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*It implies a fawning, flattering, and submissive attitude that is often seen as insincere, manipulative, or degrading.

Ben Alligin
26th May 2026 09:15
What obsequiousness*.

Mr Athow is a civil servant paid for by the state i.e. us. Why on earth should we be so grateful for his contribution/thoughts to Accounting web? That is his job as Director of Policy and Strategy to try and justify the unjustifiable, which he failed miserably to achieve.

Make the man present a webinar on the subject with comments and questions unfiltered. Put thou dofted cap (feather or no feather) away and pick up a pitchfork Mr Fisher.

The only thing I am grateful to Mr (soon no doubt to be Sir) A for, is for him showing how completely out of touch he is.

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Labour has 'no coherent plan', says Blair