Government defends Making Tax Digital amid concerns over older taxpayers

The government claim Making Tax Digital works “well for those who need it”, despite ongoing criticism over the scheme.

The controversial scheme came into force in April this year, with landlords earning more than £50,000 required to keep digital records and submit quarterly updates to HMRC using authorised MTD-compliant software.

Landlords earning between £30,000 and £50,000 will join the scheme in April 2027.

Can apply for an exemption

In a written parliamentary question, Liberal Democrat MP James MacCleary asked: “what assessment has the government made of the potential impact of Making Tax Digital on those over-70?”

In response, Labour MP Dan Tomlinson said: “The government has worked with taxpayers, representative bodies and software developers to ensure Making Tax Digital (MTD) for Income Tax works well for those who need to use it.

“The government has worked with the software industry to ensure a wide range of options are available to suit different needs and budgets, including low-cost and free software, supporting those with the simplest affairs. Many products are designed for users who manage their own tax affairs or those new to digital tools.

“Where a taxpayer cannot use MTD for Income Tax, for example due to age or disability, they can apply for exemption from the MTD requirements.”

No advantage to Making Tax Digital

As previously reported by Property118, despite the government claiming Making Tax Digital will help landlords, an accountant says this is not the case.

Simon Misiewicz previously told Property118: “There’s no real benefit beyond maybe streamlining some of the work you already do, does it help with tax returns and submissions? The truth is, I can’t see how.

“There’s no advantage for the individual in submitting quarterly returns, because HMRC doesn’t do anything with them until the end of the year. You don’t pay your taxes any earlier, and there is no real cash-flow benefit for the government”.

The government admitted in the Making Tax Digital impact assessment that landlords earning £50,000 could incur an average transitional cost of £285 and an average annual additional cost of £115.