Remember when we wrote about the Making Tax Digital (MTD) delay last year? (If you missed it, you can catch up here). Well, here we are again, dusting off the MTD file and seeing what’s changed.
Spoiler: it’s still coming, just a little slower than first planned.
If you’re a business owner wondering whether you can breathe easy or whether you need to get your skates on, this one’s for you.
A quick refresher on Making Tax Digital
In case you’ve managed to dodge MTD chat so far, here’s the short version: Making Tax Digital is HMRC’s big plan to move tax reporting online. The idea is to make the system more accurate, more efficient, and – hopefully – less stressful for everyone involved.
Eventually, most businesses will need to keep digital records and send updates to HMRC throughout the year, not just once in a big rush at the end.
Where are we now with Making Tax Digital?
After the latest delay (because, let’s be honest, who didn’t see that coming?), Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) will now kick in from April 2026 for some businesses.
BUT, and it’s a big but, it’s only those with a turnover above £50,000 who’ll be in the first wave.
If you’re earning between £30,000 and £50,000, you’ll be roped in from April 2027. Then, between £20,000 and £30,000 from April 2028.
Anyone below £20,000? You’re off the hook for now. HMRC has said they’ll have a “review” for this group before making any decisions. So it’s a bit of a “watch this space” situation.
What businesses need to be doing now
Even though Making Tax Digital feels like it’s miles away, this is a good time to get your house in order. Trust me, future you will be grateful.
Here’s what you should be thinking about:
- Check if you need to comply: You can check your eligibility here. Better to know early than be caught off guard.
- Get your software sorted: MTD means using compatible accounting software, not spreadsheets and scribbled notes. If you’re still relying on old methods, now’s the time to look at options.
- Get into the habit: Start keeping digital records now, even if you’re not required to yet. It’ll make the official switch much less painful.
- Talk to your accountant: (Hello, that’s me!) Seriously though, we’ll make sure you’re set up and ready with plenty of time to spare.
Anything else to know?
HMRC is still testing the system with volunteers. If you’re keen (or just curious), you could join their pilot scheme, but right now it’s mainly available for simple cases. For the rest of us, it’s a waiting game.
There’s also talk about quarterly updates being simpler than once feared, but until HMRC firm up the details, it’s sensible to plan for regular submissions.
One more thing: penalties are also being updated! If you miss a deadline, you’ll get a point. Rack up too many points, and you’ll face a fine. So, staying organised isn’t just a nice-to-have; it’s going to be part of keeping on the right side of HMRC.
Get ahead of MTD
Making Tax Digital isn’t going away, it’s just arriving in smaller, slower steps. If you’re a business owner above the £50,000 threshold, 2026 will roll around quicker than you think. Now’s a great time to get ready, set up your systems, and make the whole thing feel a lot less intimidating.
Got questions or want help getting ahead? You know where I am. Let’s make sure MTD doesn’t sneak up on you.
JVCA – [email protected]
