Making quarterly tax returns will prove onerous warns Katharine Quarmby tax


Digital tax demands S


elf-employed people will have to start making quarterly returns under HMRC’s Making Tax Digital


regime – and that could well cause a headache for many NUJ members. The roll-out begins in April 2026, with those with incomes over £50,000 starting then, followed by April 2027 if you earn over £30,000 in the 2025–26 tax year, then April 2028 if your qualifying income is over £20,000 in the 2026–27 tax year. Like many journalists, I attended one of the HMRC information webinars on how to get ready for MTD. Judging from the questions in the chat during the webinar, I wasn’t the only person to be confused and a bit daunted by the new system. If you are registered for VAT and come under the MTD umbrella, as one person in the chat said, it looks as if you are going to be preparing eight quarterly returns – four for each programme. I also handle the tax affairs of a


family member who had a stroke and for whom I have power of attorney. So I am dreading having to do eight myself – four for me and four for him – as well as advising my young adult children on their tax affairs. The National Audit Office (NAO) has raised consistent concerns. In a critical report looking at the progress made with MTD in 2023, the NAO said that “MTD was originally approved with the expectation it would reduce burdens on business taxpayers” but HMRC’s business case for the costs and benefits of MTD showed only a “partial analysis… The business case should have shown that the combined costs to HMRC and customers of proceeding with MTD for Self Assessment were greater than the additional tax revenue expected.” You will have to choose accounting software so you can show your


12 | theJournalist


income and expenditure, and keep digital records for quarterly returns and updates. My accountant says the end-of-year tax return will remain the same and will include the usual other categories, such as Gift Aid. In terms of your digital records,


you will need to show dates for expenditure and amounts, and create summary totals of income and expenditure via category. You can correct records and keep a digital record of the disallowable portion of an expense in your software, as well as the full expense – which is of course where it starts to get harder. This brings us neatly to why this is being brought in, given it does not change our tax liabilities or payment dates. While HMRC makes much of


saying it will benefit us, this is more to help HMRC transition from a legacy system to a digital one; it will create more admin and it is not clear it will be more accurate than what people do now.


I submit everything to my


accountant, discuss it with her and it is then submitted by a professional who understands issues such as disallowable expenses more than I ever would. It will almost certainly push up my accountancy bill as she sorts out any issues I have had with updates over the year.


Indeed, the Institute


of Chartered Accountants in England and Wales has highlighted concerns about the quarterly updates in particular. It states: “The Institute supports the digitalisation of accounting records and HMRC services but opposes the quarterly update element of


Find out more


Government explainer https://makingtaxdigital. campaign.gov.uk


National Audit Office report https://tinyurl.com/ muhfm4xk


TechRadar’s software choice https://tinyurl. com/5evkwz


Federation of Small Businesses commentary https://tinyurl. com/5n74jume


Institute of Chartered Accountants view and advice https://tinyurl.com/ y7562asm


MTD income tax as it adds significant cost for no significant benefit.” My thoughts exactly – plus HMRC has


decided not to provide self-employed people with free software, so we are left sifting through commercial models and asking each other for advice. An April 2025 report by the


Federation of Small Businesses revealed the huge cost of tax compliance on small enterprises, reporting that owners who were surveyed already spend an average of 44 hours per year on tax administration. It also stated that many found dealing with HMRC – or even getting through to them on the phone – difficult. MTD is only going to make a creaking system even worse, many warn. The government, unsurprisingly, defends MTD, saying that it will help businesses in the long run. I trust my accountant’s opinion more. She has years of experience of working with people in the creative sector and has assured me support as I work through it – but warns it is not going to be easy.


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