MTD: survey shows thousands unaware of Making Tax Digital

Over the last few years, we’ve worked hard to let our clients and readers know about Making Tax Digital for Income Tax Self-Assessment (MTD ITSA).

On our website alone, we’ve published a thorough guide to Making Tax Digital. It covers MTD for VAT (currently operating), MTD for Income Tax Self-Assessment (due to start in 2026), and MTD for Corporation Tax (unlikely to start earlier than 2026).

In addition, we’ve written a good number of blogs concerning MTD. These have documented everything from Making Tax Digital requirements through to changing deadlines. You can browse these articles here.

Finally, to help our clients make the transition, we’ve made free MTD compliant cloud accounting software available. If you are a business client, you can get complimentary use of Freeagent. If you are a landlord client, our Landlord Software Platinum Service gives you access to Hammock, specialist MTD software for buy-to-let portfolios.

Even though we’ve tried to shout the MTD message from the rooftops, we were slightly alarmed to read the results of a new survey. It seems that thousands of businesses are still unaware of MTD ITSA!

The MTD survey

The survey in question was conducted by the Administrative Burdens Advisory Board (ABAB). This is an independent board that includes people from a range of business backgrounds and professions. ABAB exists to provide business insight and expertise to HMRC.

The ABAB survey got 8,487 responses from sole trader businesses. 5,281 of them answered the question: “Are you aware of the next phase of MTD for ITSA?”

Worryingly, 43.8% of respondents were not aware of either MTD for ITSA itself, or the next phase of it. A further 23% were only slightly aware.

Of those who were aware, only 17.2% found out via their accountant or agent!

With this in mind, we felt it might be helpful to offer you a recap on MTD for ITSA, how it will work and how you need to prepare.

What to do next

If you are unaware of what Making Tax Digital is, we recommend you read our guide. In brief, Making Tax Digital is about moving to a system of digital tax records and returns. When it comes to Income Tax Self-Assessment, paper tax returns will be all but abolished. Instead, you’ll need to use MTD compliant software to make quarterly submissions. At the end of each financial year, you submit an ‘End of Period Statement’ to make any adjustments, such as to capital allowances or losses. You can then declare other income and capital gains using a ‘Finalisation Statement’.

As things stand, MTD ITSA is expected become mandatory for some people from 2026. You can read more about the timetable in this post. In short, if you’re self-employed or a landlord with a tax-year turnover of £50,000+, you’ll need to be ready for MTD ITSA by April 2026. You’ll make your first return on 5th August for the first quarter (to 5th July).

From April 2027, landlords and self-employed people with a turnover of more than £30,000 will also have to comply with MTD ITSA.

It is important to remember that the current tax year (2024/25) will determine whether you need to comply with MTD ITSA from 2026.

We can help you with MTD

If you feel you’re not ready for MTD ITSA, we can help. Speak to your account manager if you are currently a client. If you are not, ask us to take care of your Self-Assessment Tax Returns. Once we’ve signed you up, we’ll give you the advice you need plus access to the relevant cloud accounting software.