The Spring Statement brought important updates on Making Tax Digital (MTD) for Income Tax, setting out the next steps in the government’s plan to simplify tax reporting and help businesses embrace digital working.
Craig Ogilvie of HMRC reaffirmed the government’s commitment to rolling out MTD in a way that works for businesses, with bookkeepers playing a crucial role in supporting small business owners through the transition.
Lower Income Threshold Confirmed for 2028
A key update is the confirmation that the income threshold for MTD for Income Tax will reduce to £20,000 from April 2028, following the phased introduction:
“This phased approach gives businesses and their bookkeepers time to prepare and adopt digital tools that will support their efficiency and growth,” said Ogilvie. “Bookkeepers, in particular, are well-placed to help small business owners navigate these changes.”
Making End-of-Year Tax Submissions Simpler
A key change confirmed today is that all MTD for Income Tax users will need to submit their end-of-year information and final declaration through software, replacing alternative submission methods.
“This is an opportunity to make the tax process smoother and more efficient,” Ogilvie explained. “With bookkeepers guiding their clients through the transition, we can ensure small businesses have access to the best solutions tailored to their needs.”
Bookkeepers at the Heart of MTD Success
ICB CEO Ami Copeland welcomed today’s announcement, highlighting the central role of bookkeepers in delivering MTD for the UK’s small businesses.
“Bookkeepers are key to running the nation’s small businesses. Because they work hand in glove with their clients, they are best placed to advise them on the transition to digital record-keeping,” said Copeland. “We recommend that bookkeepers begin the conversation with their clients now to ensure they are ready for these changes.”
Next Steps for MTD Implementation
Ahead of April 2026, the government will introduce legislation to finalise exemptions and provide clarity on specific tax arrangements that require tailored solutions. HMRC has assured stakeholders that these updates will allow businesses and bookkeepers to plan ahead with confidence.
HMRC is inviting bookkeepers and other stakeholders to engage through established forums and networks to help shape the final details of the policy. If you have questions, you can contact the MTD team at mailboxmakingtaxdigital@hmrc.gov.uk.
As MTD moves forward, ICB will continue to provide guidance and updates to support bookkeepers in leading this transition, ensuring small businesses are fully prepared for the future of digital tax.
