Having opened volunteering 18 months ago, government’s tax agency has since attracted participation from thousands of individual taxpayers and specialist agents that will soon need to adopt the online system
Almost 5,000 people around the country have volunteered to test out the digital service HM Revenue and Customs will shortly require users to adopt in order to file annual income tax self-assessment returns.
From April of next year, the scope of HMRC’s Making Tax Digital (MTD) programme is to be expanded to include those making self-assessment submissions for annual earnings of £50,000 or more. From April 2027 those earning £30,000 and upwards will be required to move to the digital regime.
Ahead of the mandation of MTD for income tax payments made by – or on behalf of – the self-employed, landlords, and microbusinesses, HMRC last year kicked off a lengthy testing process for the service, with volunteers invited to sign up to take part.
Exchequer secretary to the Treasury Daniel Tomlinson this week revealed that thousands of people had taken up the opportunity to do so.
“In advance of MTD’s rollout, nearly 5,000 volunteers have signed up to test the service,” he said. “HMRC’s dedicated teams are working to ensure the new systems and processes operate as planned and the right guidance and training is in place for both advisors and users.”
When it launched the testing process in April 2024, the department indicated that it was particularly keen to work with professional agents that handle tax affairs on behalf of clients.
Guidance issued by HMRC instructed prospective participants that “by volunteering to test Making Tax Digital for Income Tax, you’ll: be able to influence what the service is like in future; be ready to support clients when the service becomes mandatory; become familiar with the software you’ll use with your clients; get dedicated support to help you when you begin using the service; [and] stay up-to-date with competitors using the service, or begin using the service before them.”
More than 18 months on from the release of these guidelines, Tomlinson pledged that “HMRC has worked to ensure that MTD for Income Tax works well for all kinds of businesses”.
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He said: “In-year, quarterly updates are not like full tax returns; they are simple, unadjusted summaries of income and expenditure, acting as a snapshot of quarterly trading activity. They will be populated automatically through software and can be submitted easily. This process has been designed to be simple for users and quick to complete. Quarterly updates reduce the risk of error by moving record-keeping closer to real time. They also make preparing the tax return easier, as much information is already captured and categorised. Updates can help inform estimates of tax liability and prompts to help taxpayers get their tax right.”
The minister, whose comments were made in response to a written parliamentary question from Green MP Ellie Chowns, added that the tax agency will continue working to ensure that new adopters are supported to get up and running with the new digital tools, and that they are not adversely affected by the tech programme.
“The government has taken steps to minimise costs to businesses resulting from MTD, including work with the software industry to ensure free software is available for those with simple affairs,” he said. “Following MTD’s introduction in April 2026, HMRC will support MTD users with fully-trained advisers in sufficient numbers to manage anticipated demand.”
MTD has already been rolled out across all VAT returns, with implementation taking place in two stages: first in 2019 for firms with taxable annual turnover in excess of £85,000; and then in 2022 for all other companies.
The expansion into HMRC’s income tax operations has been postponed by two years, having originally been schedule to commence in 2024. The department last month revealed that, while filing returns electronically will be mandatory as a matter of course, individuals and small businesses can be exempt from doing so if they are considered digitally excluded.
