Serious questions over Making Tax Digital – Will HMRC ever be able to deliver?

There are serious questions over the future viability of Making Tax Digital (MTD) following yesterday’s announcement that it is to be delayed by two years to April 2026.

Nimesh Shah, CEO at Blick Rothenberg, said: “It is over 7 years since the original digital transformation project was announced by George Osborne in 2015. There are now serious questions as to whether it serves the intended goal of offering taxpayers a digital gateway to their taxes, and HM Revenue & Customs (HMRC) enhancing efficiencies and reducing compliance.

“The MTD project has consistency stalled, with HMRC having to contend with a burgeoning tax code and the digitisation agenda not being able to keep pace.

“The latest announcement goes beyond a simple extension, with the minimum threshold level being increased to £50,000, and a phased introduction for landlords/sole-traders earning more than £30,000 from April 2027. I wouldn’t be surprised if businesses generating less than £50,000 are completely taken out of MTD nearer April 2027.

“The extension and increase to the minimum threshold is good news for hundreds of small businesses that were facing a significantly higher compliance burden – but why has it taken HMRC so long to get to this inevitable point?

“MTD was always going to be challenging for businesses, because it introduced a greater compliance burden – and businesses have been left largely in the dark about how they were expected to satisfy the requirements given HMRC delays.

“Nevertheless, small businesses will be relieved that the significant changes that were planned for April 2024 are delayed for at least two years. However, small business will be wondering if MTD will ever land, and if it does, in what form. There is a serious loss of credibility in HMRC to deliver their digital mandate in my view.”

Would you like to know more?

If you would like to discuss any of the above in more detail, please contact Nimesh using the form below, or through your usual Blick Rothenberg contact.