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The UK Government has issued a response to an online petition demanding the cancellation of proposed changes to digitise tax systems from April 2026. Over 16,800 people have backed the e-petition on the UK Government’s Petitions Parliament platform.
Petition organiser Saira Khan contends that numerous small enterprises rely on paper-based tax documentation and may not possess the necessary digital expertise to transition entirely online. Nevertheless, the Treasury defended the proposals in a written statement, asserting that Making Tax Digital “will help businesses stay on top of their affairs, boost productivity and ensure more of the right tax is paid”.
The department confirmed it would provide assistance to users adopting the new framework and declared it has “no plans to delay” the rollout, reports the Daily Record.
The Treasury continued: “Making Tax Digital delivers value for money by increasing the amount of tax collected. This ensures that more money can go to funding vital public services, like the NHS, and supporting growth across the UK. Making Tax Digital for VAT has already been successful at reducing error and increasing tax revenues.
“HMRC’s published evaluation shows Making Tax Digital generated additional VAT revenue, as forecast, in the range of £185 million to £195 million in 2019 to 2020. Making Tax Digital for Income Tax will build on this, and we expect it will result in an additional £1.95bn in tax cumulatively between its introduction and the 2029-30 financial year.”
The Treasury went on: “Making Tax Digital for Income Tax is a new approach that uses modern technology to help customers stay on top of their tax affairs and avoid errors. It will build on the successful introduction of Making Tax Digital for VAT which applies to over 2m VAT-registered businesses.”
It added: “The Government understands this is a big change for many taxpayers and agents, and it is committed to supporting them through the transition. It has worked with the software industry to ensure there is free and low-cost software available to support smaller and simpler businesses.”
Once the ‘Stop HMRC implementing making tax digital and enforcing quarterly submissions’ petition reaches 100,000 signatures, the Petitions Committee will consider it for parliamentary debate. The Treasury’s complete response can be accessed here.
Making tax digital
HMRC projects that approximately 780,000 self-employed people and property owners will need to adopt MTD for Income Tax from April 2026, with an additional 970,000 following suit from April 2027.
The quarterly reporting system aims to distribute administrative tasks more evenly across the year, bringing tax reporting closer to real-time and helping enterprises manage their finances whilst avoiding end-of-year pressures.
HMRC is encouraging qualifying customers to join a pilot scheme through GOV.UK and begin their preparations immediately. Representatives can also enrol their clients through the same platform.
Craig Ogilvie, HMRC’s Director of Making Tax Digital, recently said: “Tax is changing and with just six months until Making Tax Digital for Income Tax comes into effect, now’s the time to start preparing. MTD is about spreading your tax admin throughout the year instead of that January scramble to complete your Self Assessment return.
“There are free software options available, and early feedback from our testing participants shows the system is straightforward once you are familiar with it. Don’t delay – go to https://makingtaxdigital.campaign.gov.uk/ to learn more and sign up to our testing programme today.”
MTD for Income Tax represents the most substantial transformation to the Self Assessment system since it was launched in 1997. The changes will simplify matters for self-employed people and property owners to manage their tax responsibilities and ensure accurate payments.
Starting from April 2026, people earning qualifying income exceeding £50,000 will be required to maintain digital records, utilise MTD-compatible software and file quarterly summaries of their earnings and expenditure to HMRC.
These digital obligations will assist businesses in saving time through more streamlined record-keeping, minimise mistakes in tax computations, and offer a clearer understanding of their tax liabilities year-round. Qualifying income, which includes gross earnings from self-employment and property before any tax allowances or expenses are deducted, will be subject to new rules.
From April 2027, those with qualifying income above £30,000 will be required to use Making Tax Digital (MTD) for Income Tax, with the threshold decreasing to £20,000 from April 2028.
The gradual introduction of MTD for Income Tax follows the successful roll-out of MTD for VAT, which now aids over two million businesses in reducing errors and saving time on their tax affairs. Businesses that participated in the MTD for VAT testing phase were better equipped for the transition to quarterly reporting.
A 2021 independent report revealed that 69 per cent of mandated businesses experienced at least one benefit from MTD for VAT, while 67 per cent reported a reduction in potential record-keeping errors.
