To help clear things up, we’re busting the 10 biggest myths about MTD for IT.
1. “MTD for IT starts in 2024 – I’m already late!”
Not true. Although originally the date was set as 2024, the new rules now come into effect from April 2026 for self-employed individuals and landlords with income over £50,000, from April 2027 for those with income over £30,000 and from April 2028 for those with income over £20,000. If you fall below these thresholds, you’re not yet in scope – although you may still join voluntarily.
2. “I’ll have to submit a tax return every quarter now.”
False. You won’t be submitting full tax returns each quarter. Instead, you’ll send summary updates of income and expenses through MTD-compliant software. A final declaration (similar to the current Self Assessment) will still be due annually.
3. “MTD means I’ll pay tax four times a year.”
This is a very common misconception. No – the payment schedule isn’t changing. Tax will still be due once or twice a year, depending on your current arrangements (e.g., 31 January and 31 July for payments on account). MTD is about how you report, not when you pay.
4. “I can just carry on using spreadsheets.”
Partly true – but with a catch. You can use spreadsheets, but only if they link to compatible bridging software that can submit your figures to HMRC digitally. Manual entry and copying and pasting will not be allowed.
5. “MTD is just for VAT – it doesn’t affect me.”
MTD for VAT has been in place for some time, but MTD for Income Tax is a separate requirement, aimed at landlords and the self-employed. If you earn over the relevant thresholds and file a Self Assessment return, this will affect you.
6. “I don’t need to do anything until 2026.”
Technically true, but not advisable. Waiting until the deadline may leave you scrambling to find suitable software, understand the process, and get your records in order. Starting early gives you time to adapt smoothly – and avoid surprises.
7. “It’ll take loads more time and paperwork.”
Not necessarily. If you’re already keeping good digital records, the switch may be relatively painless. Many cloud accounting tools make quarterly updates easy, and over time MTD could even reduce your admin by keeping your finances more up to date.
8. “I’ll need an accountant to do everything for me.”
Not unless you want to. Many people will be able to handle their own submissions with the right software. That said, an accountant can add real value by reviewing submissions, offering tax planning, and helping avoid mistakes.
9. “It’s all about catching people out or increasing tax bills.”
MTD is not a revenue-raising measure. The aim is to improve accuracy, reduce tax gaps caused by errors, and modernise the system. HMRC isn’t trying to trip anyone up – but if you don’t comply, penalties could apply in future.
10. “There’s only one MTD-compliant software I can use.”
Wrong. HMRC has approved dozens of software options, ranging from basic tools for sole traders to full-featured platforms for growing businesses. It’s about finding the right fit – and we can help you choose one that suits your needs.
The next step
At UHY, we are already supporting clients in preparing for Making Tax Digital for Income Tax. Whether you want help selecting software, setting up your records or simply understanding your obligations, our team is here to guide you every step of the way. Please get in touch with Chris Davies or your usual UHY MTD adviser for advice.
