Go back to insightsDon’t Get Caught Out by the Communication Gap on Making Tax Digital
A significant number of taxpayers who will be affected by the upcoming changes to tax reporting have yet to fully engage with what’s coming.
Communication has never been HMRC’s strongest suit. Although it reliably issues tax return notices early in the tax year, its responsiveness elsewhere is notably slower. HMRC’s latest performance statistics (released January 2026) show that between January and November 2025:
- Over one in five pieces of correspondence went unanswered for more than 15 working days.
- One in eight letters was still awaiting a reply after 40 working days.
- The average call waiting time was over 13 minutes, and more than one in ten callers abandoned their call entirely.
This lack of timely communication caused problems when the High-Income Child Benefit Charge (HICBC) was introduced in 2013. It wasn’t until September 2025 that HMRC finally introduced an online service allowing affected individuals to pay the charge through PAYE, avoiding the need for a self-assessment tax return.
Now, another reform is due from April, and it risks generating the same “I had no idea” reaction that plagued the HICBC rollout. This time the change relates to new reporting requirements under Making Tax Digital (MTD).
Who is affected first?
MTD will initially apply to individuals who:
- are registered for self-assessment,
- receive income from self-employment or property (or both), and
- had qualifying income (mainly gross income from those sources) exceeding £50,000 in the 2024/25 tax year.
If you fall into this group, you will need to:
- Sign up for MTD, HMRC won’t automatically register you, though it will issue reminders.
- Use HMRC recognised software or obtain ‘bridging software’ if you prefer to keep using spreadsheets or existing systems.
- Submit quarterly updates of income and expenses to HMRC.
- File an end-of-year return by 31 January following the end of that tax year.
Tellingly, HMRC announced in the Autumn 2025 Budget that late submission penalty points will not apply to quarterly updates for 2026/27, a sign of its expectations around the transition.
You may be thinking, “I’m under the £50,000 threshold, so I’m fine.” Unfortunately, that gap is closing:
- the threshold drops to £30,000 for 2027/28,
- and to £20,000 for later years.
Tax treatment depends on individual circumstances and may change in the future.
The Financial Conduct Authority does not regulate tax advice.
27th February 2026