How are finance professionals holding up in the face of MTD delays?

We spoke to AAT members about whether they’re still preparing for Making Tax Digital given its missed deadlines.

In November last year, the Public Accounts Committee (PAC) warned that HMRC had ‘lost sight’ of customers in the planning, design and delivery of Making Tax Digital (MTD). In its report, PAC found the programme had increased the admin and financial burden on some taxpayers, failed to be transparent about ‘substantial costs’ and failed to take ‘sufficient’ account of the ‘realities’ faced by businesses, accountants and bookkeepers.

MTD, which requires businesses and taxpayers to keep digital tax records via compliant software and submit quarterly updates to HMRC, is intended to simplify filing tax returns and reduce error and fraud. But the programme has been beset with delays since it was first unveiled in 2015. Then, the entire programme was intended to last five years. Now, the current completion date is not expected until 2027.

From April 2022, MTD for VAT – first introduced in 2019 – became mandatory for every VAT-registered business.

The current timeline for the next two phases of the MTD programme is as follows:

• MTD for Income Tax:
  • April 2026: Mandatory for self-employed, businesses and landlords with a turnover of £50,000+.April 2027: Mandatory for self-employed, businesses and landlords with a turnover of £30,000+.All new businesses incorporated on or after 6^th April 2025 must incorporate MTD for Income Tax in the tax year after they commence trading (i.e. 2026/2027).
  • HMRC is currently reviewing businesses with turnover of less than £30,000.

• MTD for Corporation Tax will not be mandatory before April 2026 at the earliest.

The accumulated delays, the widespread criticism and cynicsm and general lack of trust in the programme overall has all taken its toll, leading to a general feeling of MTD-related fatigue and complacency among many businesses, accountants and bookkeepers, despite the looming deadlines.

Indeed, since PAC’s report just under a year ago, it doesn’t look like much has been done to address the cited concerns. PAC wrote again to HMRC in April, asking it to readdress the lack of ‘governance and accountability’.

MTD expert Rebecca Benneyworth, who has been documenting her experience with HMRC’s private beta testing service for MTD for Income Tax, warned earlier in the summer that too many firms are ‘unprepared’ for the income MTD for Income Tax.

So how are AAT members preparing for the next MTD mandate?

Businesses that take a wait-and-see approach may soon be in difficulties

Karen Feltham MAAT, Owner, Aligned Accounting

The Making Tax Digital scheme has had many delays since its announcement, creating a level of uncertainty around the scheme’s importance and the level of accuracy for implementation dates. Many business owners, particularly smaller enterprises, aren’t even aware of the scheme and some are suspicious of it, too.

It’s easy to see why some accountants and bookkeepers have begun to feel complacent as well. HMRC’s lack of commitment and constant postponements have led to a lack of urgency from businesses when it comes to digital record-keeping.

MTD was intended to simplify tax compliance, bringing efficiency and transparency. However, with each delay, businesses are left wondering when – or if – the scheme will be enforced. While some larger firms have adapted early, many small businesses remain hesitant, seeing little reason to adopt a system that even HMRC appears reluctant to enforce and I believe the uncertainty surrounding this may be problematic.

While HMRC may seem lenient now, digital tax compliance is inevitable. Businesses that take a wait-and-see approach may find themselves scrambling when deadlines are finally firmed up. By then, the cost and effort to transition will be higher than if they had embraced the change earlier.

Verdict: Businesses who take a wait-and-see approach may find themselves in difficulties when MTD deadlines are confirmed.

We were making progress but frequent delays led us to ease off the gas

Ben Rose, MAAT, Partner, Martin Seitler & Co

Most accountants are fed up of the goalposts moving every few months or with every budget. As a firm, we spent considerable time preparing ourselves before HMRC delayed the start of MTD. I’m sure many firms did the same, ultimately wasting weeks of preliminary work.

While we accept why the delays happened, delays have wasted our time. We now aren’t so much ‘fatigued’ as fed up! Of course we know it’s going to happen but at the moment, my feeling is it may well be pushed back again by the new government who may see it as an extra expense that they don’t need.

This is what’s causing the perceived complacency/fatigue and frustration. It’s in part an expectancy (maybe even a hope) that it is going to be delayed again.

As a firm, we’re definitely on the way to becoming prepared, but because of the delays we’ve stopped getting ready, even though we know inevitably we need to get back on it at some point. I think after this budget, if nothing is mentioned about a delay then we can finally say “right, we have a year to get going, let’s sort our clients out.”

I think HMRC need to do more to explain who is exempt and what the final thresholds are going to be. Many accountants still don’t know which of their clients are going to be exempt or not. I think a final MTD for ITSA email needs to go out detailing everything.

Verdict: We were making progress with MTD preparations but due to HMRC delays, we’ve eased off the gas.

I’m prepared for the technical aspects, but I’m concerned about teething problems

Sarah Hedley MAAT, Brickbooks and Payroll

I think there’s some complacency around MTD, especially because of the repeated delays and frustrations with HMRC’s service in recent years. Accountants and bookkeepers are fed up with not only the shifting MTD deadline dates but also the quality of service from HMRC.

There’s a growing sense that if HMRC struggles to provide accurate advice on their own tax rules and legislation and manage customer service, it raises concerns about their ability to effectively roll out MTD.

Personally, I don’t feel MTD fatigue, but I understand why some professionals might.

I feel prepared for the technical aspects of MTD itself, but I’m concerned about the inevitable teething problems. HMRC’s frequent errors cause massive delays, and I fear the roll-out might create chaos for clients. These issues could have serious consequences if not addressed, particularly for trades and construction businesses that rely on timely and accurate reporting.

HMRC needs to become more visible and proactive. They should ensure departments communicate better, especially where taxes overlap, like PAYE/CIS and corporation or income tax. Often, an issue in one area triggers penalties in another. Transparency and better client support are critical to restoring trust in the MTD project.

Verdict: I’m prepared for the technical aspects of MTD, but I’m concerned about the inevitable teething problems.

Would you like to contribute to future articles like this one? If so, please get in touch with Annie Makoff-Clark at [email protected].

Annie Makoff is a freelance journalist and editor.