Written by Director of Transformation, Russell Frayne
During Gravita’s recent webinar on Making Tax Digital for Income Tax (MTD ITSA), we ran a survey to gauge how prepared individuals feel ahead of the 2026 rollout. The responses highlighted a mix of uncertainty, complexity and varied approaches to compliance. The session, held in collaboration with HMRC is available to revisit through the full webinar recording. We have addressed many of the recurring questions in our Making Tax Digital FAQ.
Gravita’s Director of Transformation, Russell Frayne, offers insight into the survey results and what they mean for the Making Tax Digital roll out.
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How confident are you on MTD ITSA and being ready in time?
As the poll suggests, 11 months out from the first mandation date for MTD ITSA, 65% of those polled were undecided or not confident at all, with only 4% as being very confident. This isn’t a shock given the previous delay as well as the changes in income threshold by the new Government and announcements in the Spring statement. We as agents, as well as HMRC, must continue to provide clarity around these changes and allow taxpayers to understand fully their obligations under MTD for Income Tax.
This level of uncertainty highlights the impact that shifting timelines and legislation have had on taxpayers. Many are still unsure what action they need to take, and others may not realise how close the deadline really is. With the volume of clients affected, firms should be starting conversations now to avoid a last-minute rush in early 2026.
What MTD income streams do you have?
72% of those polled interestingly had both self-employment and property income, which was not as expected as the feeling was that most would have a single source of qualifying income, not both. Having both income streams adds to the digital record-keeping and filing complexity, as the MTD-compliant software will need to deal with both revenue streams, making planning ahead even more relevant for these types of taxpayer.
How aware are you of your tax liability before preparing your tax return?
It was great to see the majority having some form of idea around their tax liability ahead of preparing their tax return. This is one element of MTD for Income Tax: to make the taxpayer more aware of their tax obligations throughout the year, as opposed to once the tax return has been submitted. For the 11% polled who had no idea at all or liked the end-of-year surprise, this will give them more awareness of their obligations as opposed to running into them blind at the filing deadline.
One of the biggest advantages of MTD is that it helps people understand their tax position during the year. This allows for better budgeting, better planning, and fewer nasty surprises in January. But this only works when digital records are up to date and the software is doing its job properly.
How are you managing your record keeping currently?
The software poll showed a real spread of those polled, with the majority, as anticipated, running off spreadsheets, which, although MTD compliant when paired with bridging software, have a real opportunity to improve the way they maintain their records through digitalisation. 32% were already on cloud accounting software, which, as highlighted by HMRC, will need reviewing to ensure it is MTD compliant for Income Tax (not just VAT). 20% of those polled were still using manual records or handing records to their accountant annually. These will see the biggest changes under the MTD requirements, so again, proactivity here is key.
The challenge with spreadsheets and manual methods is that they often rely on one person knowing the system. That may work today, but it does not scale and it is prone to error. Moving to cloud-based software can improve accuracy, reduce risk, and create a smoother relationship between taxpayers and advisers. The sooner the move is made, the less disruption there will be in 2026.
Need help understanding what MTD means for you or your clients?
Gravita can help you assess your situation, explore the right software options, and make sure you are prepared in time.
