MTD: The Debate that Divides the Accounting Industry
MTD is HMRC’s flagship programme to modernise the UK tax system by replacing annual returns with digital record-keeping and more frequent submissions. The aim is to make tax administration more effective, efficient, and easier for taxpayers to get right.
MTD has already been rolled out for VAT-registered businesses above the £85,000 threshold, but the next stage will bring self-assessment taxpayers—such as sole traders and landlords—into the fold. This transition is set to come into effect from April 2026 for those earning over £50,000, with those earning over £30,000 following in April 2027.
While the intention is clear—greater transparency and reduced errors—the rollout has sparked a fierce debate across the accounting profession.
The Optimists: Seeing the Value in Regular Engagement
Many accountants and industry voices are welcoming MTD as a long-overdue step forward. They see it as a chance to bring clients closer to their finances and move away from outdated practices.
Lucy Cohen, co-founder of Mazuma, shared her perspective in a widely discussed LinkedIn post:
“Want my hot take?
Making Tax Digital is the best thing to happen to the UK tax system in decades.
Why?
It brings sole traders and those with income under self assessment into a space where they are more in touch with their tax on a regular basis.More regular filing means a necessity to be more engaged with your figures in some way. And what gets measured gets managed.
The shoebox full of receipts just doesn’t cut it any more.
…And anyone who thinks that you can thrive financially when your accounting system can be ignored for a year at a time is, well, wrong.”
Cohen, and others who share her view, believe MTD will push taxpayers to adopt better habits and modern digital tools, ultimately improving financial health and reducing the end-of-year scramble.
The Sceptics: Warning of Risk and Uncertainty
On the other side, there is deep concern among practitioners who feel the project is premature, under-tested, and risks burdening clients and firms with unnecessary complications.
One professional commenting on AccountingWEB, under the name tornado, wrote:
“At the moment there is so much wrong with the MTD project that my advice to clients is not to sign up to MTD until it is credible, complete and tested to destruction.
Our clients, and us, have a right not to be forced to use systems that are not fit for purpose.”
Another accountant, fact checker, echoed the sentiment, likening MTD to a reckless leap:
“Can anyone tell me any other project with this much potential to close down businesses… where you’d be happy to jump blindfolded in the deep end of the pool—even though there’s no clarity on the depth of the water, or the location of the finishing line, or what variety of dangerous creatures may be encountered during your uncertain swim?”
For these professionals, the lack of clarity, incomplete specifications, and absence of robust testing are red flags that could put livelihoods at risk.
Bridging the Divide: Where Do We Go From Here?
The divide in opinion could not be starker. For some, MTD is the long-awaited modernization of tax. For others, it feels like an untested experiment being forced onto professionals and taxpayers alike.
What is clear is that HMRC has a responsibility to manage the switchover with care. Accountants must feel well-informed, supported, and confident that the systems they are required to use are fit for purpose. Without this trust, resistance will only grow stronger.
Looking ahead, automation and AI could hold the key. Intelligent bookkeeping tools, AI-driven reconciliation, and automated tax reporting may make digital-first compliance not just manageable but genuinely beneficial. If these innovations are developed and adopted alongside MTD, they could transform what now feels like a burden into an opportunity for efficiency and growth.
Final Thoughts
Making Tax Digital is more than a technical change—it represents a cultural shift in how tax is managed. Whether you view it as a welcome modernization or an ill-prepared experiment, the profession will need to navigate it together. The hope is that, with care and technological support, the transition can become a step forward rather than a stumbling block.
AccountingWEB article referenced: Accountants are springing into MTD action | AccountingWEB
