Over 580,000 Not Yet Signed Up To MTD

 

Over 580,000 self-employed workers and landlords have yet to sign up for HMRC's Making Tax Digital for Income Tax scheme, despite less than a month remaining before the August 7 registration deadline.

A Freedom of Information request has revealed that of the 864,000 people required to register for the scheme by April 6 this year, only 282,637 had signed up by May 20.

The figures, obtained by international accountancy firm Azets and confirmed by HMRC, show that around two-thirds of those required to join the new digital tax system had not yet registered when the data was compiled.

 Good luck everyone! 

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The Costs of New MTD Rules Ignored by HMRC

 

HMRC has failed to do any assessment of the tax loss that will result from people quitting work as a result of the new MTD rules which require 5 tax returns a year. 

 If just 1% of self-employed taxpayers with turnovers above £20k cease working there will be a direct tax loss of £75m & an indirect loss - from VAT, indirect taxes, & knock-on effects on the wider economy - of another £150m. And that estimate excludes anyone from the top 10% of self-employed taxpayers.

Source 

There is an opt out if you claim religious beliefs prevent you from filing online. 

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HMRC’s Hated Digital Regime Lies in Ruins: Only 4% of Taxpayers Have Signed Up – And the Taxman Is Panicking

Listen up, fellow sufferers of the UK tax racket. While you were busy trying to keep your business afloat, HMRC quietly dropped a bombshell to the Public Accounts Committee: just 18,000 poor sods had bothered to sign up for their shiny new Making Tax Digital (MTD) income tax regime. That’s a pathetic 3.8% of the 864,000 self-employed souls and landlords they’re targeting from 6 April 2026.

HMRC have since briefed the press that the number has “risen” to 30,000. Thirty thousand. Out of nearly three-quarters of a million. That’s still only about 4%. Four percent! The rest of you – the sane 96% – are apparently too busy running actual businesses to play happy families with the taxman’s latest digital leash.

This isn’t a “slow start”. This is outright rejection.

What Exactly Is This Hated Regime?

For those still blissfully unaware (lucky you), MTD for Income Tax means the end of the simple annual Self Assessment for anyone pulling in more than £50,000 from self-employment or property income (based on your 2024/25 return). From April:

• You must keep digital records – no more scruffy spreadsheets or shoeboxes.
• You must file quarterly updates – four times a year, not once.
• You must use only HMRC-approved software that talks directly to their system.
• Then, of course, the usual end-of-year declaration to tie it all up with a nice little bow of extra admin.

HMRC have been bombarding people with letters, running “voluntary” testing (where 20,000-odd quarterly updates have apparently been submitted), and telling everyone it’s “straightforward” and “helps reduce errors”. Translation: “Please just roll over and make our lives easier while we make yours a living nightmare.”

The Cost? Your Time, Your Money, and Your Sanity

HMRC’s own figures admit an average one-off hit of £280–£350 to get set up, plus £110–£115 every year thereafter. That’s the official lowball. In reality, plenty of sole traders and landlords who currently DIY their tax will now be forced to shell out for proper software subscriptions – some “free” versions come with heavy restrictions, others will cheerfully sting you for hundreds a year.

And for what? So HMRC can watch your income and expenses in real time, like some creepy Big Brother with a calculator. Quarterly reporting doesn’t make tax simpler – it makes compliance four times more painful. It’s not about accuracy; it’s about control. Easier audits, faster penalties, more data to feed their risk engines.

Remember, this is the same HMRC that has form for multi-billion-pound IT disasters. The same department that can’t even answer the phone without putting you on hold for three weeks. And now they expect 864,000 of Britain’s hardest-working people – the ones actually creating jobs and paying the bills – to trust them with yet another half-baked digital fantasy?

The Taxman’s Spin Is Laughable

Their latest press release bleats that “thousands of sole traders and landlords have already joined” and “more than 20,000 quarterly updates” have been submitted in testing.

Well, congratulations. Out of 864,000 targeted, you’ve managed to persuade roughly the population of a small village. The rest of us have seen through the con. We’ve read the small print. We’ve seen the petitions racking up signatures demanding this nonsense is stopped. We know that “no immediate fines” in the first year is just code for “we’ll fine you later, once we’ve got you hooked”.

This Is Taxpayer Rebellion in Action – But If You Must Comply, Here’s the Least-Worst Kit

Only 4% uptake with weeks to go until the supposed launch? That’s not teething trouble. That’s a full-scale revolt by people who’ve had enough of being treated like cash machines with legs.

The self-employed and landlords already shoulder more than their fair share – higher National Insurance, energy bills through the roof, endless red tape. Now HMRC wants to turn your bookkeeping into a part-time job. No wonder the silent majority is voting with its feet (or rather, refusing to lift them towards the sign-up button).

HMRC will no doubt blame “lack of awareness”, or “software issues”, or “misinformation”. The truth is simpler: people can smell a bad deal from a mile off. This regime isn’t “making tax digital” – it’s making tax more expensive, more intrusive, and more hated than ever.

So here’s the message to HMRC from the 96%:

We’re not signing up because we don’t trust you. We don’t need quarterly digital shackles. And we sure as hell aren’t going to thank you for the privilege of paying for the software that lets you spy on us more efficiently.

Scrap it. Delay it indefinitely. Or watch the chaos unfold in April when the real numbers come in and the excuses start flying.

The ball’s in your court, HMRC. But judging by the last few decades, you’ll probably just kick it into the long grass and send out more letters.

In the meantime, the rest of us will be over here, running our businesses, paying our taxes (reluctantly), and – if forced – grudgingly picking one of the above tools to stay out of the penalty trap.

Because this digital disaster? It’s already dead on arrival.

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Making Tax Digital: HMRC’s Bureaucratic Nightmare Unleashed on Self-Assessment Taxpayers

 

Starting April 2026, His Majesty’s Revenue and Customs (HMRC) will impose its long-delayed Making Tax Digital (MTD) for Income Tax Self-Assessment (ITSA) on millions of self-employed individuals and landlords, marking a new era of administrative torment. What began as a promise to modernise tax systems has morphed into a bureaucratic quagmire, drowning taxpayers in red tape and forcing them to shoulder an absurd workload. With quarterly returns, mandatory digital record-keeping, and a raft of new compliance hurdles, MTD is less a reform and more a punishing overreach by an agency that seems intent on punishing entrepreneurship rather than supporting it. Let’s break down this mess—and eviscerate HMRC for creating it.

 

The rollout begins on 6 April 2026, targeting sole traders and landlords with annual income exceeding £50,000. A year later, in April 2027, the net widens to include those earning over £30,000, with the regime eventually encompassing all self-assessment taxpayers by 2028. This phased approach might sound reasonable, but it’s a thinly veiled excuse to stagger the chaos rather than mitigate it. 

 

The core requirement? 

 

Taxpayers must ditch paper records and embrace digital software approved by HMRC to submit quarterly updates. These updates—due by 7 August, 7 November, 7 February, and 7 May each year—demand detailed income and expense data, a stark departure from the single annual self-assessment return. On top of this, an End of Period Statement (EOPS) and a Final Declaration must be filed annually, effectively doubling the workload for those already stretched thin.

 

The administrative burden is staggering. Quarterly returns mean four times the filing frequency, forcing small business owners and landlords to become part-time accountants. HMRC’s justification—modernisation and better tax compliance—rings hollow when you consider the practical reality. Small traders, many of whom lack the resources for sophisticated software or the time to master it, will now face a relentless cycle of data entry, software subscriptions, and potential penalties for errors. The requirement to maintain digital records with “reasonable accuracy” adds another layer of stress, as taxpayers grapple with vague guidelines and the threat of audits. And let’s not forget the End of Period Statement, a redundant exercise that duplicates data already submitted quarterly, all culminating in a Final Declaration that feels like a cruel encore to an already exhausting performance.

 

HMRC’s track record only amplifies the outrage. This is the same agency that delayed MTD from its original 2018 target to 2026, citing “technical issues” and taxpayer feedback—only to ignore the latter and double down on a system widely criticised as unworkable. The Federation of Small Businesses and countless accountants have warned that mandatory quarterly reporting will overwhelm small enterprises, yet HMRC presses ahead, seemingly deaf to the chorus of dissent. Posts on X reflect the growing dread, with self-employed individuals lamenting the “5x increase” in admin and calling it a system that treats their time as worthless. The agency’s own pilot programs have been met with lukewarm participation from accountants, a clear sign that even professionals see this as a headache in the making.

 

The financial cost is another slap in the face. Taxpayers will need to invest in compatible software—often with recurring fees—while potentially hiring help to navigate the system, all to satisfy HMRC’s digital diktat. Meanwhile, the agency boasts about raking in millions from landlords and self-employed workers, framing MTD as a revenue grab dressed up as progress. The 2015 announcement of MTD promised to “maximise tax revenue” and “modernise systems,” but the reality is a clunky, over-engineered framework that punishes compliance rather than rewarding it. HMRC’s guidance documents, dripping with technocratic jargon, offer little clarity, leaving taxpayers to decipher their obligations through trial and error.

 

This isn’t modernisation—it’s bureaucratic overkill. HMRC has turned a simple annual tax process into a quarterly ordeal, ignoring the fact that small businesses and landlords are already juggling cash flow and client demands. The agency’s insistence on digital submission, paired with its sluggish support and opaque penalty regime, suggests a disconnect bordering on contempt for those it claims to serve. Instead of simplifying tax, HMRC has crafted a nightmare that will drain time, money, and morale from the self-employed community. As April 2026 looms, one thing is clear: HMRC’s MTD is a self-inflicted wound on the UK’s entrepreneurial spirit, and taxpayers are the ones left bleeding.

Tax does have to be taxing.


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HMRC’s Digital Disaster: Labour’s Tone-Deaf Push Under Rachel Reeves

In a move that can only be described as tone-deaf, the Labour government has forced an additional 900,000 people into HMRC’s disastrous digital self-assessment system. This ill-conceived expansion, spearheaded by Rachel Reeves, comes despite a litany of problems and delays that have plagued the project from the outset. Rather than fixing a system that’s already buckling under its own flaws, the government has decided to double down, dragging more taxpayers into a bureaucratic quagmire that’s as frustrating as it is inefficient.

A System Riddled with Flaws

The digital self-assessment project was meant to streamline tax filing, but it’s been a catastrophe from day one. Users have reported technical glitches that crash the system at critical moments, confusing interfaces that leave even tech-savvy fillers baffled, and a shocking lack of support from HMRC when things inevitably go wrong. Small business owners, freelancers, and landlords—already drowning in administrative red tape—have been the loudest critics, pointing out that a process meant to simplify their lives has instead become a time-sucking nightmare. 

 

Yet, instead of hitting pause to address these glaring issues, Labour and HMRC are forging ahead with reckless abandon. It’s as if they believe that throwing more people into a broken system will somehow fix it—a logic so flawed it’s almost laughable.

Who Pays the Price? The Vulnerable, Of Course

This decision doesn’t just expose HMRC’s incompetence; it disproportionately punishes those least equipped to cope. The elderly, many of whom lack the digital literacy or hardware to navigate this mess, are now being coerced into compliance. People without reliable internet access—yes, they still exist in 2023—are similarly left scrambling. And let’s not forget the small business owners, already stretched thin, who now face yet another layer of administrative torment.

Forcing 900,000 more people into this flawed digital drive risks a surge in errors, missed deadlines, and financial penalties—all because HMRC can’t get its act together. It’s not just unfair; it’s inefficient, undermining the very taxpayers the government claims to support. This isn’t progress—it’s punishment dressed up as modernisation.

Rachel Reeves: The Architect of Chaos

At the heart of this debacle stands Rachel Reeves, whose stubborn insistence on expanding the program reeks of arrogance and disconnect. Rather than tackling the system’s fundamental problems—glitches, usability, support—she’s chosen to plough ahead, putting more people at risk of frustration and failure. It’s a classic case of prioritising political optics over practical reality, and it’s taxpayers who’ll foot the bill.

 

Reeves’ refusal to acknowledge the project’s failures isn’t just shortsighted; it’s borderline negligent. Scaling up a system that’s already failing its current users is like pouring water into a sinking boat and calling it a repair. Her leadership on this issue has been a masterclass in how to alienate the public while pretending it’s all for their own good.

A Better Way Forward—or Any Way That’s Not This

The government’s decision to ram this digital disaster down the throats of 900,000 more people is bureaucratic overreach at its worst. A sensible approach would start with fixing the damn system: iron out the glitches, simplify the interface, and bolster support for users. Only then should anyone even whisper the word “expansion.” 

 

Until that happens, HMRC’s digital self-assessment drive remains a textbook example of good intentions gone horribly wrong—a project so plagued by problems that it’s a wonder anyone thought it was ready to take on more victims. Labour and Rachel Reeves need to ditch the hubris, admit the failures, and rethink this mess before it buries taxpayers under a pile of digital debris. Anything less is an insult to the people they serve.

Tax does have to be taxing.

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HMRC’s New PAYE Portal: A Recipe for Disaster?

In a recent speech to the Chartered Institute of Taxation, Exchequer Secretary to the Treasury James Murray unveiled HMRC’s ambitious plan to launch a new public portal for PAYE (Pay As You Earn) taxpayers, set to go live next month. The portal promises to serve 34 million taxpayers by allowing them to check employment and pension data held by HM Revenue and Customs (HMRC), update their details, and understand changes to their tax codes. On paper, it’s a bold step toward modernising tax administration and empowering taxpayers. In reality, however, HMRC’s track record and its reliance on outdated, creaky legacy systems make this venture a disaster waiting to happen.

 

A Noble Idea, But a Shaky Foundation

The concept of a user-friendly digital portal is appealing. Taxpayers deserve transparency and easy access to their records, especially in an era where online banking and government services are increasingly streamlined. For a workforce of 34 million, a functional PAYE portal could reduce confusion around tax codes, cut down on administrative errors, and save time for both citizens and HMRC staff. But the devil is in the delivery—and HMRC’s history suggests it’s ill-equipped to pull this off without significant hiccups.

 

The department’s core issue lies in its sprawling, antiquated IT infrastructure. HMRC operates a patchwork of legacy systems, some of which date back decades. These systems were never designed to handle the scale, speed, or security demands of a modern digital portal serving millions. Integrating them with a shiny new front-end interface is akin to bolting a sleek electric engine onto a horse-drawn carriage—it might look impressive, but it’s unlikely to run smoothly.

 

Legacy Systems: The Achilles’ Heel

HMRC’s reliance on old technology isn’t a secret. Over the years, reports from the National Audit Office (NAO) and other watchdogs have highlighted the department’s struggles with outdated IT. Systems like the National Insurance Recording System (NIRS2) and the PAYE Online Service are clunky, fragmented, and prone to failure. These platforms weren’t built for real-time data updates or user-driven interactions—they’re relics of a bygone era, designed for back-office processing rather than customer-facing functionality.

 

Take the PAYE system itself: it’s a labyrinth of interconnected databases that often fail to sync properly. Taxpayers frequently report discrepancies between what employers submit and what HMRC records, leading to incorrect tax codes and over- or under-payments. A new portal layered on top of this mess won’t fix the underlying flaws—it’ll merely expose them to millions of users. Imagine 34 million people logging in to check their data, only to find outdated records, missing pension details, or inexplicable tax code changes. The potential for chaos is immense.

 

A History of Digital Missteps

HMRC’s track record with tech projects doesn’t inspire confidence. The department has faced criticism for botched initiatives like the Real Time Information (RTI) rollout, which aimed to modernise PAYE reporting but left small businesses scrambling to comply. More recently, the Making Tax Digital (MTD) program—intended to digitise tax returns—has been plagued by delays, cost overruns, and complaints from users about its complexity. These projects stumbled despite years of planning and significant investment. Now, HMRC wants to launch a public-facing portal in a matter of weeks? It’s hard to see this ending well.

 

The rushed timeline only amplifies the risk. Building a secure, reliable portal for 34 million users requires rigorous testing, data migration, and staff training—none of which can be adequately accomplished in a month. HMRC’s legacy systems will need to feed accurate, up-to-date information into the portal, but their history of glitches and data mismatches suggests this is a tall order. A single failure—say, a corrupted database or a security breach—could grind the system to a halt, leaving taxpayers frustrated and HMRC scrambling to respond.

 

The Human Cost of a Digital Disaster

Beyond the technical challenges, there’s a human element to consider. HMRC’s workforce is already stretched thin, with staff cuts and office closures reducing its capacity to handle queries. A new portal will inevitably generate a flood of calls and complaints as users encounter bugs, struggle to navigate the interface, or dispute inaccurate data. Yet the department’s helplines are notoriously understaffed, with wait times often measured in hours. If the portal flops, taxpayers will bear the brunt—facing delayed refunds, incorrect tax bills, or simply being unable to access their own information.

 

And then there’s security. Legacy systems are notoriously vulnerable to cyberattacks, and HMRC holds a treasure trove of sensitive data: names, addresses, National Insurance numbers, and income details for millions. A hastily launched portal could become a prime target for hackers, especially if it’s bolted onto old infrastructure with known weaknesses. A data breach would not only undermine public trust but also expose HMRC to legal and financial fallout.

 

Too Big, Too Soon

HMRC’s new PAYE portal is a classic case of ambition outpacing capability. The idea of giving taxpayers more control is laudable, but the department’s creaky legacy systems and history of digital stumbles make it painfully clear that this project is doomed to falter. Without a complete overhaul of its backend infrastructure—something that would take years, not weeks—HMRC cannot hope to deliver a portal that’s functional, secure, and user-friendly for 34 million people.

 

The Treasury may see this as a shiny new toy to flaunt, but taxpayers and HMRC staff will be left picking up the pieces when it inevitably breaks. Unless the department delays the launch, invests in modernising its systems, and prepares for the onslaught of demand, this portal risks becoming yet another chapter in HMRC’s long saga of technological woe. For now, it’s not a question of if this will be a disaster, but how big the disaster will be.

Tax does have to be taxing.

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• Up to £100,000 Reimbursement: If HMRC knocks, rest assured your defence costs are taken care of up to £100,000.

What Solar Protect Does for You:

• Robust Defence: Empower your accountant to handle all HMRC correspondence, meetings, and appeals without financial worry.
• Full Support: From dealing with initial letters to attending tribunals, your tax return agent can focus on defending you, not on the cost.
• Peace of Mind: With Solar Protect, sleep easy knowing your accountant can fight for your rights without hesitation, thanks to our comprehensive coverage.

Why Risk It? HMRC enquiries can be stressful and costly. With Solar Protect, you're not just buying insurance; you're securing your financial peace of mind. 

Get Protected Today! Don’t wait for the letter to arrive. Secure your Solar Protect Tax Investigation Insurance now and ensure your accountant can robustly defend you against any HMRC scrutiny.

 

Click Here to Safeguard Your Business and Peace of Mind! 

Please click here for details.

HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"