Making Tax Difficult (MTD)

You may have seen lots of (rather hysterical) stuff on TV/Online about how this "massive change in the UK tax system is looming - starting April 2026

1. First let's be clear this ONLY applies to self-employed people, so NOT if you're a one-man band ltd, or any kind of partnership etc. NB. HMRC include property landlords in this.

2. And also only if your 24/25 self-employed income was over £50k. In the following tax year the limit drops to £30k.

3. Other sources of income like dividends/interest are not subject to MTD.

If you're ensnared by this new 'efficiency' drive:-

• Every three months you have to upload a digital file of your business activity for the previous three months (bit like doing a vat return). This file will be raw accounting records, so not like management accounts with accruals etc.

• 99.42% of all entrapped taxpayers will expect their accountants to do this for them.

• Obviously the data will be pointless, because the end of year accounts will have all the usual timing differences, depreciation, provisions etc.

• MTD can of course be dealt with by us, so a bit like VAT returns, you just have to give us the data, and we file the Return every three months.

• We use top drawer software for all Tax Returns, so you can be sure that if you give us accurate data, the tax bill will be right.

• Will our fees go up due to this? you bet, why should we do this nonsnese for free.

HMRC notes here in case you're still unclear.

• UK Gov website says

• "Digital record-keeping will deliver time-saving benefits for taxpayers".

• It's a mystery how this statement can be plausible as at the moment we just file a single return once per year. In future there will be five returns to file each year! PLUS the usual SA return listing all your various income sources.

Also:-

Craig Ogilvie (who's never been outside his Ivory Tower in his life it seems), HMRC’s Director of Making Tax Digital, said:-

"MTD for Income Tax is the most significant change to the Self Assessment regime since its introduction in 1997. It will make it easier for self-employed people and landlords to stay on top of their tax affairs and help ensure they pay the right amount of tax."

Thank heavens for civil servants reliably coming up with practicable solutions to all life's little problems.

Need to pay some tax? click here for how.

Abell Limited