11 June 2026
Accountex London 2026 saw a representative from HMRC take to the stage and address the fact that only 35 per cent of those who should have registered for Making Tax Digital (MTD) for Income Tax had done so.
From 6 April 2026, the 864,000 sole traders, landlords and self-employed individuals with qualifying incomes over £50,000 are compelled to register for MTD.
As only 303,000 have done so, a new way of viewing the obligations is being championed by HMRC.
A more casual approach is being positioned to de-escalate concerns around administrative tasks, but could such a mindset create a new tax trap?
Are people wrong about Making Tax Digital?
It seems to currently be the view of HMRC that most people who should be registering for MTD are not doing so for fear that it will be too challenging to keep up with the new obligations.
The quarterly updates are the focus, given that the first is due on 7 August 2026.
Rather than seeing it as an additional tax filing, HMRC has insisted that they are to be more of a snapshot of current finances that can be updated or amended later on.
Instead, the focus should remain on the annual tax filing, with all other aspects of MTD working to make this easier.
The value of MTD may still be lost if the focus remains exclusively on administrative tasks rather than how people can benefit from the new system.
Likewise, the penalty system itself may complicate this new vision of a relaxed approach to quarterly updates.
Are quarterly updates difficult to manage?
The idea is that all aspects of MTD should come together to make the overall tax filing system simpler to manage.
Utilising the right accounting software should allow for a continuous stream of data that can be fed into a quarterly update and the eventual annual tax filing.
This is reinforced with the penalty system that will punish those who miss the deadline for a quarterly update.
However, the notion of treating quarterly filings in a casual manner could create problems for the annual filing rather than alleviate them.
If people focus on getting an update done to meet the deadline rather than as a useful tool that benefits them, they risk submitting poor-quality data that will need to be cleaned up before the annual tax return can be filed.
This will extend the annual tax scramble rather than prevent it, as it will be necessary to fix the quarterly updates at that stage.
By focusing purely on compliance box ticking, the true value of MTD may be lost and its goal missed entirely.
How should Making Tax Digital be viewed to benefit those affected?
Taking control of your own finances is the core value of MTD.
Getting expert tax advice can help you experience a new degree of financial freedom as you are no longer kept in the dark about your own money.
Focusing on the quarterly updates as a core check-in point for your accounts can help you to take a more dynamic approach to changing economic conditions.
You can be more aware of your tax obligations and better able to plan for them, freeing up your budget to tackle more exciting areas.
Getting the support of a trusted tax adviser is vital for making the most of this major upheaval and we are here to support you.
Changing over from paper and spreadsheets to a dedicated piece of software might feel strange, so we can help you to find the right system for your needs and budget.
We are happy to review your current processes to better optimise them for the new world of MTD.
Focusing on staying compliant is important and we will help you meet your deadlines.
However, making the most of MTD is far more valuable for you.
Get in touch with our team to discover the true value of Making Tax Digital.
