Making Tax Digital

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And the now Health Secretary accepted the assurances of the 'dumb clowns'

By Rob Swan
30th Jun 2026 16:20
Excellent work by Lucy

MTD and AI - neither suited for the other: AI isn't 'intelligent' (in this context) and MTD is one stupid mess, (probably a whole network of stupid messes, behind the scenes!). I think Lucy's primary point in her articles is that the decision makers within HMRC are just 'dumb clowns'. And Yes! I know that's disrespectful, but why should we respect dumb clowns*.

Oh, and MTD's 'sell-by date' was 2020. Pretty sure it's well past its 'use-by date' now.

*Dumb Clowns: People being funny idiots, driving a wonky car which billows out smoke and then falls apart when they try to fix it. Only difference here is, it's not a car and it's not funny.

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Send in the clowns!

By kevinringer
01st Jul 2026 11:33
HMRC had argued one of the reasons for introducing MTD ITSA is it will be cheaper for businesses than traditional accounting. Section 1.289 of https://assets.publishing.service.gov.uk/government/uploads/system/uploa... said businesses would save £400 million by the end of 2019-20.

The profession argued MTD ITSA would cost businesses extra. HMRC ignored us. Over the years HMRC changed its tune and admitted the cost saving would be smaller than anticipated, then admitted there wouldn’t be a cost saving, then admitted there would be a small cost. HMRC now admit the transition cost will be £380 million for the 970,000 taxpayers affects (=£392 per taxpayer, representing between 1.3% and 1.9% of their gross turnover) and £101 million per year thereafter (=£104 per taxpayer), see https://www.gov.uk/government/publications/making-tax-digital-for-income....

Closing the tax gap is another flagship reason that MTD was announced in 2015, but just like HMRC's argument of cost savings which HMRC now admit was wrong, HMRC will inevitably eventually admit HMRC were wrong about the tax gap too. Back in 2015 we were told that one of the key items that would be actively closing the tax gap would be the prompts and nudges that would be built into the software, but those prompts and nudges have never materialised. There is no intelligence in software. Taxpayers are not bookkeepers and don't understand how to use their software, or when they're making mistakes. I'm expecting the tax gap to become a tax chasm.

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Are journalists clowns too?

By FactChecker
01st Jul 2026 14:22
"HMRC now admit the transition cost will be £380 million for the 970,000 taxpayers affects (=£392 per taxpayer, representing between 1.3% and 1.9% of their gross turnover)" ...
... which is why they're so keen to control communications about 'the project'.

Not only have they managed to keep that 'transformation' out of most News reports ... but just imagine the furore if any headline (accurately) read:
"HMRC imposes additional one-off tax on gross turnover of the self-employed"!

[I'm ignoring the fact that, for many, £392 will be exceeded - and that %age impact will obviously be greater for the poorest (so just wait for the next two tranches)]

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By Duggimon
01st Jul 2026 09:36
It has never been easier to fraudulently under report or, perhaps more worryingly, to set up an imaginary business for the purpose of laundering money, to generate massive amounts of accounting data with no bearing in reality and to receive vast sums of ill gotten gains dressed up as legitimate taxpaying businesses.

HMRC are introducing this system without any real means of being able to properly audit it, and at a time when they've never been less able to audit the old existing and more straightforward system. The tax gap is best plugged by making it easy for businesses and people to report the correct figures, for accountants to prepare and file the necessary reports with minimal ambiguity, and having a tax authority empowered, resourced and able to check that the information is correct.

MTD makes all of those goals more difficult.

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By Steve Drake 1
03rd Jul 2026 09:16
It has become apparent that there is a problem between the interaction of the Self-Assessment system and Making Tax Digital system which has become obvious to accountants who had clients on the Beta testing program. I personally had 5 clients who I placed on the Beta testing system, had no problems in filing the 4 quarterly submissions but payments made to HMRC using the UTR numbers are becoming lost between both systems. One of the clients who was on a tax repayment of over £7k on his submitted 2025/2026 tax return, the SA system shows transfer made to null (which apparently means transferred to MTD) yet the MTD record does not show it. Two phone calls to SA ended up being transferred to MTD and an officer saying we know their is a problem with the Beta testers. I was also informed that although the client had signed box 14 on page TR6 of the return for the repayment to come back to myself, this authority becomes invalid because MTD overrides SA hence the repayment can only be sent to the taxpayer!! Considering only about 3000 people were in Beta testing (I had 5 of those) what on earth happens when supposedly another 850,000 come on board now. Why haven't HMRC tested their systems before now? More headaches incoming!!!

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When will the idiots in charge wake up and get it? Burnham please do something and scrap it.

By Nick Belton
03rd Jul 2026 17:04
One reason I immediately ruled out joining the pilot was because it was inevitable there would be problem for agents and taxpayers involved with that pilot and - sure enough - here they are.

I can't even raise a smile about MTD. I am a sole practitioner with a finite amount of time, this utter disaster of a policy poses an existential risk for businesses like mine.

The most stressful part of the job - indeed, the ONLY stressful part of the job - is having to deal with the ineptitude of HMRC.

Almost 100% of my calls to HMRC are to obtain information that either isn't visible on their website, or doesn't come through the API links, to chase refunds requested but not made, perfectly good Tax Returns amended incorrectly with impunity, appeals against incorrect penalties and interest levied not being processed, searching for PPDCGT letters lost at HMRC's end, PAYE schemes not created in a reasonable timeframe - the list is long but inevitably about to get longer because MTD is guaranteed to fail.

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By ireallyshouldknowthisbut
03rd Jul 2026 11:09
Has the hype met reality?

The tax return end is where all work and pain is, and seems to have got 5% of the attention.

Chucking a number into the void every quarter is relatively trivial.

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Labour party inaction....Inaction is the failure to act or do anything to resolve a situation. It refers to the state of remaining idle, passive, or refraining from intervening when action is expected or required.

Making Tax Digital for Income Tax (MTDIT) is not officially scrapped, but its rollout has been plagued by ongoing delays, technical glitches, and widespread criticism.

Many tax professionals and freelancers consider the system highly problematic and fear it is struggling to function effectively ahead of mandatory deadlines.

Key Issues and Criticisms:

Low Adoption Rates: Only around 35% of eligible self-employed individuals and landlords had registered for MTD in testing phases. Many taxpayers are confused by eligibility thresholds and software requirements.

Administrative Burden: Instead of one annual tax return, the system requires four quarterly updates plus a final declaration. Studies have shown this added workload has caused widespread stress, with a significant number of sole traders considering quitting or moving back to full-time employment to escape the admin.

Systemic IT Glitches: HMRC's testing and sign-up systems have been criticized for confusing design flaws (such as users accidentally locking themselves into a mandatory mandate just by clicking the wrong start year). Tax statements and Payments on Account have also experienced split-system glitches within HMRC’s platform.

Lack of Readiness: The House of Commons Public Accounts Committee has previously warned that HMRC’s planning and delivery have increased costs and failed to take the realities of business taxpayers into account.

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By denise shulman
06th Jul 2026 11:22
I had one client in testing, both a sole trader and a Landlord. Cannot file End of Year as there is software issue which is our commercial software not including the mortgage interest relief in the computation so I cannot finish it and advise the client of the liability, this has been under review by the development team for 3 weeks!

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By Rob Swan
07th Jul 2026 14:31
"Well they need to get it all working properly eventually...."

IMHO that's unlikely. There are just too many variables and by choosing to rely solely on 'commercial' software which may or may not work correctly because HMRC keep messing about with the API and it's very poorly documented.
Technically the project is a shambles and when that happens with projects of this scale and complexity it's practically impossible to fix it. I also expect there's a significant turnover of people and programmers working on MTD, which - for those who know - is a clear indication of impending failure. The political nature of the situation makes it extremely difficult for those in charge to do anything other than pretend everything is OK. MTD is most definitely not OK and the signs are obvious.

When - because I don't think it's an 'if' - a significant number of people can't submit/file their YE and/or HMRC cannot collect the taxes they're due and MTD is all over the news headlines there will be some awful combination of meltdowns. And when that happens, MTD is gone, gone, gone.

But Health Secretary MP Murray thoroughly interrogated HMRC on this subject.....but was he talking about lawnmowers or tax? Holy ****!

AI:

It looks like your query might refer to two completely different subjects: the UK government's Making Tax Digital (MTD) initiative championed by MP James Murray, or Murray and MTD, which are prominent brands of lawnmowers and garden equipment.