10 Common Myths About MTD for IT
3rd July 2025
With just 9 months to the start of Making Tax Digital (MTD) for IT (Income Tax) in April 2026 here are 10 common myths about MTD for IT that can lead to confusion:
1. MTD for IT is already mandatory for everyone
MTD for IT has been delayed and will be phased in gradually, starting with self-employed individuals and landlords with income over £50,000 based on the 2024/25 Self Assessment Tax Return.
2. I can still use spreadsheets alone
Not quite. You can use spreadsheets, but they must be linked to compatible MTD for IT software to digitally submit updates.
3. It’s just about submitting my tax return online
MTD goes beyond that. It requires keeping digital records and sending quarterly updates to HMRC — not just an annual tax return.
4. Only accountants need to worry about MTD for IT
Actually, MTD affects all businesses and landlords above the thresholds, although we here at Whitings are here to help, compliance is ultimately the taxpayer’s responsibility.
5. There won’t be any penalties for non-compliance
There will be a points-based penalty system for missing deadlines once MTD for IT is fully in place. This differs to the self assessment penalty scheme.
6. MTD software is expensive and complicated
Many solutions are affordable, and tailored for small businesses and sole traders. HMRC will not be providing software, and submissions will not be able to be made directly through their website, as they are currently for self assessment.
7. If I’m not VAT registered, MTD doesn’t apply to me
MTD for VAT and MTD for IT are different systems. Even non-VAT registered individuals might need to comply with MTD for IT if their income exceeds the threshold.
8. I’ll have to pay tax every 3 months
MTD doesn’t change the due dates for self-assessment tax – the payments remain in January and July —it changes how and when you report your income.
9. HMRC will calculate my taxes for me
MTD for IT helps HMRC get more timely data, but individuals and businesses are still responsible for maintaining records and submissions.
10. I have loads of time before it starts
It’s smart to prepare now: We suggest get familiar with digital recordkeeping and explore software options early.
Get In Touch
If you require advice or assistance in regard to MTD for IT please contact your local office where we will be happy to guide you through the changes.
Disclaimer - All information in this post was correct at time of writing.
