Whether we like it or not HMRC's MTD pilot steps up a level in April.
From April 2026 small businesses, essentially landlords and sole traders, with a turnover in excess of £50000 will have to submit accounting information to HMRC every 3 months.
It is a delightfully silly idea to improve record keeping - the disorganised will continue to be so and the organised already were but now with an extra tier of administration. There are many better ways to achieve the same result.
However, it ain't going away. It is not intellectually demanding but massively time-consuming. As a, significantly, affected practitioner told me it is the sheer time to explain to clients what is involved, how it affects them and at the end of the day there is just no good reason for it. (Ok, HMRC have good reasons but try telling that to the joiner/plumber etc).
Add to this this is the sector with the smallest accountancy budget. An extra layer of fees to set-up new accounting routines is not affordable nor the extra fees every 3 months. For those making VAT submissions the extra step is not so bad. Most are on software with bank feeds etc.
It is the chunk below VAT registration but above £50000. As the practitioner advised it is going to be a combination of the client doing a bit and us doing a bit.
Whilst full MTD reporting is just under two years away it has to be sensible to make use of HMRC's pilot to put a few clients on the system. The big-bang approach of trying to make it all work on 6 April 2026 has disaster written all over it.
The podcast's guest is Emma Rawson a leading tax consultant and specialist. Emma explains how to enrol and why you really should consider the pilot.
Your practice can learn the pitfalls and problems so scaling up is not such a big mountain in 2026.
The contents include
2:07 Which taxpayers are affected
2:38 When the MTD pilot starts
2:55 The new HMRC pilot compared with previous versions
3:18 Which clients can be signed up? Do you have to sign up all clients?
5:31 Why joining might help with the penalty regime
6:17 Which taxpayers will have to join MTD quarterly reporting and from what date?
9:00 Which quarters have to be used?
10:32 What has to be submitted and the 'fifth' submission
12:54 API enabled software
15:15 Three-line accounting
16:06 Using spreadsheets
17:17 When do submissions have to be made by?
19:59 Cumulative basis
22:00 The digitally excluded and MTD
24:30 Quarterly payments????
26:34 How the turnover is calculated and it has a nasty surprise
33:33 How to put clients on the pilot basis
The podcast is free - go www.thethingswedofortax.co.uk to download
Individuals can sign up here or agents through their services account