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Making Tax Digital /Difficult

Journalist: Emma Lunn, Freelance

ended 02. July 2026

Looking for expert comments on Making Tax Digital who can comment on:

How complicated is it to choose from nearly 90 software options (don't say it's easy to pick one, because it is not)? What catches should the self-employed look out for ? (i.e. cheaper software might not do everything needed, some options will require you to have a separate business account/open a new business account with a particular bank).
The importance of the 7 August deadline - this is when first quarter submissions need to be made - will those mandated into MTD be ready? What happens if people don't file their figures on time?
What does 375,000 sign-ups out of 850,000 people mandated into MTD for 2026/27 say about HMRC's awareness campaign? (i.e. it's insufficient).
How will MTD raise costs for landlords and sole traders (i.e. many will pay an accountant to do MTD for them, so costs will go up)?
How does filing figures quarterly really help the self-employed, bearing in mind the figures can be changed later, and tax payment dates stay the same?
What might lie ahead for HMRC (i.e. people who haven't even heard of MTD won't do anything, and the problem will get worse when lower earners enter the scheme in 2027/28)?

3 responses from the Newspage community

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Editor
Harvey Dhillon
Founder & CEO at Zmartly
With weeks to go before the first 7 August deadline, fewer than half the people HMRC mandated into Making Tax Digital have signed up. That is not public apathy, it is a campaign that has not reached them. From 6 April 2026 anyone with self-employment and property income over £50,000 must keep digital records and file four quarterly updates, then a year-end declaration. Here is the catch: the tax is still worked out once and paid on the same dates, so many will file four times a year for a bill that has not changed. If this is you, do not panic about a late quarterly update, because there are no penalty points for lateness in the first year, but choose compatible software and go digital now, because that grace ends and the cheapest tool is rarely the one that does everything you need. The real worry is what comes next: people who have never heard of MTD will do nothing, and it worsens when the threshold drops to £30,000 in April 2027.
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Editor
Matthew Knight
Chief Freelance Officer at Freelancing.Support
Rather than seeing MTD as a new item on the to-do list for a small business owner, this is the opportunity to get on top of your admin and processes to reduce that "end of year anxiety" around doing your taxes. It's also going to help with any surprise tax bills if you're reviewing your taxes every three months, giving you more time to put additional cash aside, if there's a shortfall. Keeping on top of things quarterly is a sensible strategy, and finding good tools to keep good records, not just for MTD, is essential. Going with a trusted name for a tool is a smart move, and it doesn't have to add too much cost - FreeAgent, for example, comes free with many bank accounts, and banks like Starling and Tide have built-in MTD tools too.
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Editor
Nouran Moustafa
Practice Principal & IFA at Roxton Wealth
Making Tax Digital is being sold as simplification, but for many sole traders and landlords it looks like another admin bill with a software subscription attached. Choosing between nearly 90 products is not a tick-box exercise. Cheap software can be a false economy if it cannot handle every income stream, property, bank feed or accountant access someone needs.

The 7 August deadline matters, even though there are no late quarterly-update penalties in 2026-27. People still need digital records and all four updates before they can finalise their return. With 375,000 signed up from 850,000 expected to be mandated, HMRC cannot call awareness good enough.

Quarterly filing does not change when tax is paid. It creates four new compliance moments for people who did the books once a year. For those needing an accountant or upgraded software, it raises costs. Digital tax can work, but only if it reduces effort. At the moment, it risks becoming quarterly paperwork dressed up as progress.