HMRC is today launching a pilot scheme for Making Tax Digital, the controversial proposal for quarterly reporting for landlords and the self-employed.
Ahead of the new MTD rules being introduced in April 2026, tax agents will from today be allowed to sign up to the pilot for MTD, subject to having an agent services account. The pilot is targeted at firms with clients who are self-employed or landlords with an annual income over £50,000.
Making Tax Digital for Income Tax Self Assessment is being introduced by HMRC “to modernise the way self-employed individuals and landlords manage their tax affairs, helping avoid errors and get tax right”.
Craig Ogilvie, HMRC director of Making Tax Digital, says: “We want to ensure that this service meets the needs of you [tax agents] and your clients. To support this, we are expanding our testing programme criteria for MTD ITSA. You will be able to sign up your clients from 22 April 2024.
“Taking part will involve using software compatible with MTD to keep digital records and submit quarterly updates. This will give you the opportunity to get ahead of MTD changes with selected client(s) before it becomes mandatory, with access to our dedicated MTD customer support team.”
HMRC, which will publish other specific criteria setting out which client accounts will qualify for the testing today, will hold a live online session on Friday of this week from 2pm to 2:45pm.
HMRC says of the Friday session: “Taking part in testing is a good opportunity to familiarise yourself [agents] and a small number of your clients with Making Tax Digital for Income Tax Self Assessment well ahead of 2026. This will help you to prepare your business and be ready to support the rest of your clients.
“You need to make sure both yours and your client’s record-keeping software is compatible with Making Tax Digital before you sign up. You can check compatible software options.
“If the software that you or your client prefer to use is not listed, you should contact the software provider to find out when they plan to join Making Tax Digital.”
From April 2026, self-employed individuals and landlords with total income from self-employment and property over £50,000 will be legally required to keep digital records and send quarterly updates to HMRC using compatible software. This will be extended to those with an income over £30,000 will need to do this from April 2027.
Want to comment on this story? Our focus is on providing a platform for you to share your insights and views and we welcome contributions.
If any post is considered to victimise, harass, degrade or intimidate an individual or group of individuals, then the post may be deleted and the individual immediately banned from posting in future.
Please help us by reporting comments you consider to be unduly offensive so we can review and take action if necessary. Thank you.
.jpg)
.png)
Join the conversation
Jump to latest comment and add your reply
Next we’ll all be linked up like the Borg so we can be taxed into oblivion in real time
Assuming the internet doesn’t crash or more likely the website which looks like it was designed by a 4 year old with a box of half eaten crayons
Presumably we can expect HMRC will only be working once a quarter too.
Or not working from home I expect?
They've tried that already this year
google hmrc-halts-plan-to-close-tax-helpline-for-six-months-a-year
Think I will go back to paper tax returns and plead old age!!!
That's what I'm doing Jan
Well Jan I'm 70 my defence is simple you can't teach an old dog new tricks
The Government go on about improving the standard of properties in the PRS, how do we do this when they have taxed our profits before we can think of using them for improvements, load of dick heads
Very eloquent Robert. But fully agree with it.
"Meeting the needs of clients". BS.
I've spent the last 18 months trying out landlord software that is supposed to be MTD ready. None of it seems to be able to deviate from absolute vanilla. My accountant says he hasn't yet found one that is capable of encompassing my business structure. It's not especially complicated. One of my properties is owned 40%/39.75%/20%/0.25%. The system I'm using can't cope with anything past the decimal point, so the 4th owner either has to own 1% or nothing. It completely conflicts with the Deed of Trust.
Presumably programming a system to cope with a couple of decimal places isn't difficult. They just haven't got past the point of assuming everything is either solely owned or jointly owned 50/50.
Another of my properties is owned 67%/11%/22% by myself, my husband and my son. I put in most of the deposit so pay a lower percentage of the mortgage. The program can't cope with that. Surely it's a fairly standard scenario where one of the owners chooses to pay down their share of the borrowing while the other owners don't? Isn't it totally normal for different owners to be in different tax bands and therefore have different attitudes to mortgage debt? I know if owners are married to eachother the tax office treat everything as equal but when there are more than 2 owners or it's parent and child that doesn't apply.
Ours is much simpler than your Jo but surely, if it is becoming compulsory, HMRC should have a list of suitable software. From my point of view having to subscribe to a software programme is just an added cost.
That would be too sensible.
At least it is a tax deductible cost.
I think the bit a lot of people aren't prepared for is that it can take a huge amount of time to learn how to use some of the programmes and input the necessary data. Once you've got used to it it can save time and make information easier to store and find.
A lot of them go way beyond MTD and it's hard to know what is necessary, what is helpful and what is completely surplus to requirements.
It hadn't occurred to me that sending tenants invoices would be useful. I'd managed perfectly happily for about 25 years without. Sometimes I had to remind people rent should have been paid a few days ago but now it's very rare as the system I'm using sends out an invoice to remind those who don't trust Standing Orders. Turns out some of the tenants like the invoices as a way of proving payments when applying for credit.
If anyone is thinking of doing a trial for any of the systems I would suggest starting it about now (near the start of the tax year). By the time I started playing with some of them mid way through the tax year the amount of data was immense. Some of them will automate moving forward but not from dates already passed.
Be prepared for a lot of frustration and swearing and try and find one with good customer support. It's amazing how people who develop these systems seem to assume an awful lot of knowledge people who didn't do computer studies at school simply don't know. There also seems to be an assumption we have far more accountancy skills than a lot of us have.
Please login to comment