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It’s not optional and more will be included in the following years as well
A new UK poll of businesses shows that the vast majority – 94 per cent – are not prepared for Making Tax Digital (MTD), which is being introduced from April 6, 2026. Firms were responding to the survey carried out by accountancy and business advisory firm Azets.
The new HMRC system will see those who do their own tax returns need to do quarterly updates throughout the year before a final declaration, rather than a single calculation at the end of the year.
Fraser Campbell, UK head of Accounts and Business Advisory Services (ABAS) at Azets, said: “The online poll showed overwhelmingly that the majority of businesses are simply not ready for MTD. I was alarmed that more than 63 per cent of respondents were not prepared at all, while another 31 per cent have simply ‘started preparing’.
“Less than six per cent reported that they were ready for the introduction of MTD, which is worrying given that it is the most significant overhaul of the tax system since the introduction of self-assessment 29 years ago. Time is of the essence.
“We urge all businesses affected to put plans in place to deal with this shift to ensure a smooth and compliant transition.
“Perhaps the biggest change is the need to keep digital records, use MTD-compatible software and submit updates every quarter, as well as a final declaration.”
Making Tax Digital explained
Landlords, sole traders and the self-employed with gross income above £50,000 per year will have to comply with a new Making Tax Digital (MTD) regime from next month. The threshold lowers to those bringing in more than £30,000 in April 2027, followed by those with an income of more than £20,000 in April 2028.
The tax system is being brought closer to real-time with the imminent changes affecting 864,000 individuals and landlords nationwide – with numbers predicted to rise to 2.9m within three years as income thresholds are lowered.
Another poll question, which asked what the biggest concerns were surrounding MTD for income tax, saw more than 37 per cent of respondents citing understanding what needed to be reported, 25 per cent specifying knowing what was needed to comply and more than 21 per cent pointing to choosing the right software.
Fraser added: “While MTD will mean changes in processes and software that are compliant with MTD, the switch will also bring advantages for individuals with access to near real-time information and insight about their businesses, cash flow, income and taxes for the first time.
“Getting the right advice from the right people will help those who are in scope of it be ready and confident for its introduction – whether they’re affected by the changes this April, or in the years that follow.”
Azets is a specialist business advisor to SMEs and has a dedicated MTD portal for advice.
