HM Revenue and Customs (HMRC) has issued a stark warning to more than 800,000 individuals across the UK, stating they risk being caught out by what tax professionals are calling the 'biggest tax change in a generation'.
What is Making Tax Digital and Who is Affected?
The sweeping changes form the core of the long-anticipated Making Tax Digital (MTD) programme, first announced back in 2015. From April 6, 2026, MTD for Income Tax Self Assessment (ITSA) will become mandatory for landlords and self-employed people whose gross income from property or business exceeded £50,000 in the 2024/25 tax year.
This shift requires affected individuals to maintain digital records and submit quarterly summaries of their income and expenses using approved software, fundamentally altering how they interact with the tax system.
Experts Warn of Critical Awareness Gap
Tax specialists are raising the alarm over a severe lack of readiness among those impacted. Simon Armstrong, outsourcing director at accountancy firm Menzies, highlighted a 'real lack of awareness of MTD obligations'. He noted that many business owners, already grappling with economic pressures, have not prioritised understanding the new requirements.
Nikita Cooper, partner at Price Bailey, echoed this concern, stating that numerous individuals remain 'unsure of what this means and practically how and what they need to do'.
Claire Roberts, tax partner at Moore Kingston Smith, predicted a last-minute scramble, cautioning that hundreds of thousands will be 'scrambling around after January 31 to sign up and understand what they need to do before April'.
Concerns Over HMRC Messaging and Infrastructure
Criticism has also been directed at HMRC's communication strategy and technical preparedness. Simon Armstrong argued that HMRC needs to significantly strengthen its public awareness efforts, as current messaging appears to oversimplify the scale of change and the necessary investment in software and processes.
Jack McConnel, an investigator at think-tank TaxWatch, characterised MTD as a monumental shift for nearly 3 million people. While intended to simplify and digitise tax, he pointed out that 'the technical readiness of HMRC's infrastructure remains a major concern'.
In response, an HMRC spokesperson stated: 'We've worked extensively with customers, representative bodies and software developers to ensure Making Tax Digital works for small businesses and landlords, helping them prepare for the change.' They added that the system aims to improve tax accuracy, reduce the tax gap, and give customers a better view of their business health.
With the deadline now less than three months away, the urgent message for the 800,000 affected taxpayers is clear: act immediately to understand your new obligations, choose compliant software, and begin the sign-up process to avoid penalties and disruption.
