The Future of Tax: Why Making Tax Digital Is Here to Stay
Credit : Brett Jordan
For many years, paying tax in the UK has followed the same pattern: keep paper receipts in a drawer, fill in a Self-Assessment form once a year, and hope everything adds up correctly. For some, that process has become second nature. For others, it’s a yearly headache that causes stress and last-minute panic.
That old way of doing things is on its way out. The government’s Making Tax Digital (MTD) programme is changing how individuals and businesses report their income, manage records, and interact with HMRC. While some deadlines have been pushed back and concerns raised, one thing is becoming increasingly clear: MTD is not going away.
At Stanton Accountancy, we’ve been helping clients prepare for these changes and understand what MTD means in practice. Far from being just another compliance hurdle, MTD represents a permanent shift toward a tax system that’s digital-first, data-driven, and here for the long term.
The Origins of Making Tax Digital
The idea behind MTD is simple: modernise the tax system to make it more accurate, more efficient, and more user-friendly. HMRC identified three major drivers for change:
Closing the tax gap – Every year, billions are lost due to simple mistakes in tax returns. MTD aims to reduce those errors by requiring digital record-keeping and more frequent reporting.
Bringing tax in line with modern life – Almost everything else we do with money is now digital, from online banking to invoicing. Tax reporting was one of the few areas lagging behind.
Making things easier for taxpayers – By spreading reporting across the year, MTD aims to help people avoid nasty surprises at year-end.
The programme officially began in 2019, when it became mandatory for VAT-registered businesses above the threshold to keep digital records and submit returns using approved software. Despite teething problems, this phase was broadly successful and gave HMRC the confidence to extend MTD to income tax.
The rollout for Income Tax Self-Assessment (ITSA) is being staged:
April 2026: Self-employed individuals and landlords with qualifying income from over £50,000 must comply.
April 2027: Extended to those with qualifying income over £30,000.
April 2028: Expected extension to with qualifying income over £20,000.
For those with income under £20,000 we are still waiting on confirmation from HMRC. But eventually, we believe most people who currently file a Self-Assessment return will be brought into the MTD system.
Why Making Tax Digital Is Here to Stay
The speculation has ended. MTD is here to stay and the first stage for the self-employed and landlords is only 8 months away - here’s HMRS
It makes HMRC more efficient – By collecting information quarterly and digitally, HMRC can process returns faster, reduce administrative costs, and rely less on manual data.
It helps taxpayers – Quarterly reporting means no more year-end shocks. Individuals and businesses can see what they owe as they go, making it easier to budget and plan.
It aligns with the digital economy – Businesses already rely on online banking, cloud invoicing, and digital payroll. MTD simply brings tax in line with how business works today.
It’s part of a global movement – The UK is not alone. Countries like Spain, Italy, and Australia already use digital reporting systems. Far from being an isolated policy, MTD is the UK following an international trend.
At Stanton Accountancy, we’re advising clients to treat MTD as the “new normal” rather than a temporary experiment. The government has invested heavily in the infrastructure, and the long-term benefits for both taxpayers and HMRC are too significant to abandon.
The Challenges of Making Tax Digital
That’s not to say MTD is without challenges. Critics have highlighted some important issues:
Extra admin burden – Instead of one annual tax return, taxpayers must submit quarterly cumulative updates and a the normal self-assessment return which deadline remains unchanged. For some, that feels like four times the work.
Digital exclusion – Not everyone has access to reliable internet or feels comfortable using technology. HMRC has promised exemptions in extreme cases, but these are limited.
Software costs – While there may be free solutions for simple cases, most individuals will need commercial software like QuickBooks, Xero, Sage, or FreeAgent. That’s another cost of compliance.
We work with clients to smooth these issues, recommending the right software and putting processes in place so quarterly submissions become routine rather than a burden.
The Opportunities MTD Brings
It’s easy to focus on the negatives, but there are real opportunities too:
Clarity all year round – With quarterly submissions, you’ll always know where you stand with your tax. No more big surprises in January.
Better decision-making – If you’re self-employed, having a real-time view of your profits and tax liability can help you decide when to invest, save, or set aside money for the future.
Less paper, less stress – No more shoeboxes of receipts. Digital record-keeping makes everything tidier and reduces the risk of missing documents.
Stronger relationship with accountants – Many accountants, including Stanton Accountancy, are already ahead of the curve, using MTD-ready software. This can make the process smoother and give clients better financial insights.
How to Prepare for MTD
Even if the deadlines feel a long way off, it pays to prepare early. Here’s how we recommend starting:
Choose the right software – Explore MTD-compatible platforms such as Xero, QuickBooks, FreeAgent, or Sage. We can help you find the one that best fits your business.
Get into digital habits – Start scanning receipts, logging expenses, and linking your business bank account to your software.
Consider HMRC’s pilot scheme – Joining early helps you get comfortable before compliance becomes mandatory.
Talk to Stanton Accountancy – We can guide you through the setup, manage submissions on your behalf, and ensure you remain compliant.
Stay informed – Rules may still be fine-tuned, so it’s important to keep up to date with guidance. We regularly update clients as new details are announced.
Looking Ahead
Making Tax Digital is more than just a compliance requirement; it represents a fundamental shift in how tax is administered. It won’t always be easy, and there will be challenges along the way, but the benefits are real: better accuracy, fewer errors, and a system fit for the digital age.
The future of tax is real-time, digital, and data-driven. For businesses and individuals alike, the best approach is to start adapting now rather than waiting until the deadlines loom.
Final Thoughts
Making Tax Digital is here to stay. The government is committed, the infrastructure is being built, and taxpayers across the country will soon need to comply. The question isn’t whether it will happen, but when it will affect you.
At Stanton Accountancy, we’re already working with clients to make the transition as smooth as possible. From recommending the right software to managing digital submissions, our team ensures you’re not just compliant but confident.
👉 Don’t wait until 2026. Speak to Stanton Accountancy today about preparing for Making Tax Digital — and take control of the future of your tax.