16-05-2025
HMRC set to introduce 'biggest' tax challenge for people who earn over £50,000
HMRC's Making Tax Digitalhas been named the 'biggest challenge' of the next 12 months with thousands at risk of future fines. Making Tax Digital for income tax is expected to be implemented for all self-employed people earning over £50,000 by next April.
Just 3% of self-employed people are currently using the required third-party software to submit their tax returns, demonstrating how significant the shift will be over the next year.
A new survey by accounting conference and expo Accountex London has found that 4 in 5 accounting professionals think MTD for income tax is the 'biggest challenge' of the next 12 months.
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Craig Ogilvie, Director of Making Tax Digital at HMRC said: 'With April 2026 on the horizon, we are issuing letters to customers we believe will be mandated, outlining specific requirements and timelines.
We urge those who meet the mandation criteria to join our testing programme on now to help shape the final service and make your transition smoother.'
Clive Barnett, External Readiness Lead, HMRC: 'Joining our MTD for Income Tax testing phase now gives businesses and agents hands-on experience before April 2026. Participants can prepare for this significant change with benefits such as dedicated support and penalty-free quarterly submissions.
'HMRC is making sure our marketing, communications and product launches all align to ensure there's a package of support around during the testing period and the long-term adoption to help people make the right choices for their business and clients.'
Eriona Bajrakutaj, founder of Volt Digital Transformation, explains that MTD implementation will require further communication with clients, potentially requiring firms to hire more accountants.
Eriona said: 'If you do not implement digital systems, you will need the extra capacity because we're now going to see clients five times a year. I think managing client expectations will be a big challenge because it means clients will need to reframe their business model to ensure it can report in a digital format.
But clients can actually be trained quite easily. The biggest push back to be aware of is from your team. If they don't want to go on the digital journey, it will hinder how fast you get there and how well you can service your clients. Try to involve your teams during every step of the process so they can see what you're trying to achieve and know their opinion matters as you transition.'
