Tax professionals express doubts over HMRC’s April 2026 deadline for MTD for ITSA
The proposed introduction of Making Tax Digital (MTD) for Income Tax Self-Assessment (ITSA) by April 2026 has drawn significant concerns from tax professionals, according to a survey conducted by the Chartered Institute of Taxation (CIOT) and the Association of Taxation Technicians (ATT).
The survey, which gathered the opinions of over 500 members, found that 70% considered the April 2026 start date unrealistic, and 95% lacked confidence in HMRC’s ability to oversee the MTD for ITSA. Moreover, 87% doubted the initiative’s ability to achieve its goal of closing the tax gap. The MTD ITSA proposals have also significantly eroded trust in the tax system, according to more than half of the respondents.
Alison Kerrey, chair of the joint CIOT/ATT Digitalisation & Agent Services Committee, said: “The responses from this survey make for worrying, although not surprising, reading. Despite the start date being postponed for two-years to April 2026 and the introduction being phased based on income levels, tax agents are still very concerned about the impact which the MTD ITSA proposals will have on them and their clients.
“HMRC’s insistence that MTD will make lives easier, as well as closing the tax gap, continues to be met with scepticism. There is a real lack of confidence that a convenient, user-friendly and effective system will be ready to go by April 2026.
Ms Kerrey continued: “Worse still, this survey shows that the tax profession is simply not seeing the value of MTD. In particular, members have seen no improvement in accuracy of VAT returns, or increased productivity, since the introduction of MTD for VAT, but report increases in compliance costs.
“The profession is keen to embrace digitalisation where this delivers benefits for their clients and their firms, as evidenced by the significant levels of online filing of Self-Assessment returns. However, HMRC must do more to must retain the faith and confidence of the large numbers of UK taxpayers affected by this change, and their agents.”
The government’s review of the needs of smaller businesses concerning MTD for ITSA also prompted responses. A substantial 86% of respondents opposed extending MTD for ITSA to taxpayers with incomes under £30,000, and 87% saw no utility in quarterly reporting for those small businesses.
Ms Kerrey concluded: “Tax professionals are clearly strongly opposed to extending the MTD for ITSA requirements to businesses and landlords with incomes below £30,000, seeing little to no benefit in quarterly reporting requirements and many of the other ‘pillars’ of MTD.
“The CIOT and ATT will continue engaging with HMRC to help MTD for ITSA become an effective, relevant and user-friendly system.”