Making Tax Digital won't break your clients. It will expose your workflow.

Making Tax Digital (MTD) for Income Tax mostly affects smaller operators: sole traders and landlords with qualifying income over £50,000 since April 2026, over £30,000 from April 2027 and over £20,000 from April 2028. Most of them will cope. What MTD really tests is the practice behind them. Four deadlines a year expose any workflow that relies on collecting a year’s evidence in one go.

Every fix available to practices has a cost. Here’s how I see them, after the facts.

Who’s in, and when?

It depends on qualifying income in an earlier tax year:

From	Qualifying income	Based on
6 April 2026	Over £50,000	2024–25 tax return
6 April 2027	Over £30,000	2025–26 tax return
6 April 2028	Over £20,000	2026–27 tax return

Qualifying income is gross income from self-employment and property, before expenses. Employment income, pensions, dividends and savings interest don’t count. A landlord with £22,000 of rent who also turns over £12,000 as a sole trader has £34,000 of qualifying income, however small the profit, so if those were their 2025–26 figures they’re in from April 2027.

There’s no confirmed date for qualifying income of £20,000 or less. Limited companies aren’t in scope, and partnerships don’t have a start date yet.

What changes for the client?

They keep digital records and send HMRC an update from compatible software four times a year:

Update	Covers	Due
First	6 April to 5 July	7 August
Second	6 April to 5 October	7 November
Third	6 April to 5 January	7 February
Fourth	6 April to 5 April	7 May

Each update covers the tax year so far, so a mistake is corrected in the records and flows into the next one. Clients can use calendar periods instead (1 April to 30 June, and so on) with the same deadlines. The tax return is still due by 31 January, and there’s no quarterly tax bill.

Late submissions earn penalty points: one per missed deadline, a £200 penalty at 4 points, then £200 for every deadline missed after that. For the 2026–27 tax year only, late quarterly updates don’t earn points. That covers the tax year, not each client’s first year, so clients who join in April 2027 earn points from their first quarter. Late payment costs 3% of tax unpaid after 15 days, another 3% at 30 days, then 10% a year, charged daily.

Most clients have this covered

Plenty of the people in scope already have what they need. They use bookkeeping software or a bank feed, they have an accountant or a bookkeeper, and their affairs are simple: one trade, or a couple of properties. For them the update itself is a few clicks. The software builds it from records that already exist, and HMRC never sees an individual receipt.

The client side of MTD is manageable. The practice side is where it gets hard.

The real problem is the practice’s workflow

Annual Self Assessment let weak workflows survive. Evidence arrived once a year, usually in January, and the gaps were closed with chasing, estimates and late nights. MTD doesn’t add much work per client. It adds deadlines: four a year, for every client in scope. Whatever is fragile about how a practice collects invoices and receipts now breaks four times a year instead of once.

For a practice with 80 clients in MTD, that’s 320 rounds a year of find, match, categorise and chase, instead of 80.

MTD doesn’t require a scan of every receipt. It requires a digital record of each transaction, and HMRC’s guidance is to create it as close to the transaction date as possible. The record still has to be right, and getting it right means having the evidence.

Every fix has a con

Contracts. Put it in the engagement letter: records by a set date each quarter, and a fee when they’re late or incomplete. It works, and it’s fair. But a lot of practices run on relationships, not terms, and those clients will resent being managed by clause. You fix the deadline and strain the relationship.

Higher fees for MTD clients. Quarterly work is more work, so charge for it. But the clients in scope are mostly small and price-sensitive, and some will leave.

Make clients do the bookkeeping. Give them an app and ask them to photograph their receipts. That moves the work to the people least likely to do it, and quality drops exactly where you need it.

Automated reminders. Chasing tools send the emails for you. The chase is still there; it’s just automated. The client still has to find the document and send it.

More staff, or four busy seasons. Absorb it. That costs money, and capacity is what most practices are shortest of.

Let small clients go. Simplest on paper. You lose revenue and relationships, and MTD keeps moving down the income scale.

Move clients onto limited companies. Company profits are outside MTD for Income Tax, so incorporating takes a sole trader out of scope. But a company brings its own accounts, filings and costs, and for landlords, moving property into a company can trigger tax bills of its own. The evidence still has to be collected, just for the company’s books instead. It’s avoiding the problem, not facing it.

None of these is wrong, and most practices will use a mix. But each one swaps one problem for another.

Remove the chase instead

My view is that the chase itself is the problem, not the way it’s sent. Most of the evidence already exists somewhere: in the client’s inbox, in a supplier portal, in a WhatsApp chat. So Reveal doesn’t automate chasing. It retrieves invoices and receipts from client-approved sources, links each one to its payment, explains the match and suggests a treatment. Your team makes the call, and it goes to the ledger, whether that’s Xero, QuickBooks, Sage, FreeAgent or Zoho.

Here’s how one practice used it before a client’s VAT return. Reveal isn’t MTD software, and it doesn’t submit anything to HMRC: your ledger does that. And it has a con too. The client has to approve access to their sources once. That’s one ask, instead of one every quarter.

We’re testing this in public. From 7 October to 7 November, through the second quarterly deadline, the Missing Receipt Experiment, run with our Founding Research Partner Accountants Therapy, follows ten practices as we try to retrieve missing evidence before anyone chases the client.

Before April 2027

• Find the next group of clients now. Clients with 2025–26 qualifying income over £30,000 join on 6 April 2027. HMRC decides from their 2025–26 returns, due by 31 January 2027, so flag them as you prepare those returns.
• Check every client’s software. It has to be on HMRC’s list of software that works with MTD for Income Tax. Clients who keep spreadsheets will need bridging software.
• Choose your fix before the first deadline, not after it. Whichever trade-off you pick, pick it deliberately.
• Consider a trial run. Clients can sign up voluntarily before they have to (joining partway through the year means creating digital records back to 6 April). Late quarterly updates in 2026–27 don’t earn points, so this is the lower-risk year to learn the routine.

See how Reveal works, or check which systems it connects to.

Sources

• Use Making Tax Digital for Income Tax, HMRC
• Penalties for Making Tax Digital for Income Tax, HMRC
• Find software that works with Making Tax Digital for Income Tax, HMRC

Figures checked on 2 October 2026.