HMRC to evaluate Making Tax Digital impact
12:09 AM, 20th October 2026, 5 days ago
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The government says it will continue to evaluate Making Tax Digital for Income Tax as the scheme is extended to those with qualifying income over £30,000 from April next year.
Making Tax Digital for Income Tax became compulsory in April 2026 for landlords and sole traders with qualifying income of more than £50,000.
The threshold will fall to more than £30,000 from April 2027.
Additional costs of hundreds of pounds
In a written parliamentary question, Liberal Democrat MP Monica Harding asked: “What assessment has HMRC made of additional software and accountancy costs faced by sole traders and landlords who are required to use separate systems for Making Tax Digital for Income Tax and existing VAT reporting?”
In response, Labour MP James Murray pointed to the government’s MTD impact assessment, which estimates that those with qualifying income above £50,000 may incur an average one-off transitional cost of £285 and additional annual costs of £115.
Landlords and sole traders with qualifying income between £30,000 and £50,000 may face an average transitional cost of £350 and additional annual costs of £110.
Mr Murray added: “HMRC will evaluate the impacts of MTD for Income Tax as it is rolled out to those with income over £30,000 from April 2027 and for those with income over £20,000 in April 2028.”
Landlords lose six days to Making Tax Digital admin
The news comes as research from Tide suggests landlords could spend an average of six full days dealing with Making Tax Digital administration.
According to the data, nearly half of the qualifying sole traders and landlords (44%) expect Making Tax Digital admin to eat into their normal working hours, with more than one in three (36%) stating that this will be during time they would otherwise be serving paying clients and customers.
More than half (58%) expect it to take more than a working week, with more than one in 10 (13%) predicting that Making Tax Digital will require more than 10 full days of their time in year one alone.
When the working day runs out, personal time is also paying the price. The data reveals 38% expect to complete their Making Tax Digital admin in the evenings, 35% at weekends and 32% during planned time off or while on holiday.
18 comments on this article
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Member Since October 2026 - Comments: 5
10:19 AM, 20th October 2026, About 5 days ago
So they lower the threshold on purpose to bring more self employed into their digital system
Member Since January 2024 - Comments: 436
10:37 AM, 20th October 2026, About 5 days ago
It says one-off transitional cost of up to £350 and additional annual costs of up to£115. Yet it also says “More than half (58%) expect it to take more than a working week, with more than one in 10 (13%) predicting that Making Tax Digital will require more than 10 full days of their time in year one alone.
So the Government is placing no value on landlords/self-employed time and loss of income, due to hours spent on MTD?
Can we sue the Government for paying us less than the National Minimum Wage? 😀
Member Since October 2022 - Comments: 88
12:18 PM, 20th October 2026, About 5 days ago
Sell, sell, sell
Member Since January 2016 - Comments: 253
1:27 PM, 20th October 2026, About 5 days ago
Reply to the comment left by Ryan Stevens at 20/10/2026 – 10:37
I only take about 60 seconds to submit my quarterly numbers. Not a lot of use to anyone mind, as I knocked up some random Q1-Q3 spreadsheets at the start of all this nonsense. I’ll do my self assessment in Q4 properly as I’ve done for the last 30+ years.
Member Since September 2018 - Comments: 3773 - Articles: 5
5:11 PM, 20th October 2026, About 4 days ago
Reply to the comment left by Grumpy Doug at 20/10/2026 – 13:27
exactly – the only number they are interested in is the final one.
While the idea I assume is to work out in advance how much tax will be incoming on a more periodic basis, this by default will also show drops in the tax take. Signs of income loss as a result of more costs being added to the PRS? LL’s selling up means an dead stop in income and therefore tax. Rents being effectively capped with the RRA etc will also play a part.
At some point you can’t squeeze the lemon any further.
Member Since May 2024 - Comments: 78
5:42 PM, 20th October 2026, About 4 days ago
My accountant charges me £100 plus vat for each submission. Yes I have a few houses and yes I give him lots of lovely records on Xero. Maybe that cost will drop as it’s not a difficult process. But in the meantime, it’s just more pointless cost.
Member Since September 2022 - Comments: 75
6:47 PM, 20th October 2026, About 4 days ago
They’ll carry on doing this until they bury you or the country is bankrupt.
Member Since September 2022 - Comments: 75
6:50 PM, 20th October 2026, About 4 days ago
Reply to the comment left by JoolzUK at 20/10/2026 – 17:42
And five times.accounting as against once a year. Keep passing the money and pay HMRC whilst passing GO. This is what keeps the country ticking. And Labour claims that the economy is ticking.
Member Since July 2013 - Comments: 528 - Articles: 1
12:47 PM, 22nd October 2026, About 3 days ago
Reply to the comment left by Grumpy Doug at 20/10/2026 – 13:27
Well said.
Member Since July 2013 - Comments: 528 - Articles: 1
12:49 PM, 22nd October 2026, About 3 days ago
Reply to the comment left by Grumpy Doug at 20/10/2026 – 13:27
Think I might do the same, after all, the Q2 updates the Q1 and adds it to Q2 etc etc…. so yes, just submit a load of crap and then do the real thing in Q4, alongside the normal tax return!