The Association of Taxation Technicians (ATT) wrote to HM Revenue & Customs on 17 September 2026 urging a 12-month extension of the’soft-landing’ period for Making Tax Digital for Income Tax Self Assessment (MTD ITSA) late submission and late payment penalties. The current soft-landing, which waives penalties for taxpayers who make ‘reasonable efforts’ to comply, is scheduled to end on 5 April 2027 for the first mandated cohort (turnover >£50,000). ATT cites widespread software compatibility issues, particularly for landlords with multiple property businesses and farmers with complex averaging claims, as evidence that the April 2026 mandate date was premature.
Key Takeaways
- Software Market Gaps: ATT’s survey of 1,200 members found 38% of clients in the mandated cohort lack MTD-compatible software that handles property income, foreign income, or non-resident landlord regimes correctly.
- Agent Capacity Crisis: The mandatory quarterly reporting regime increases agent workload by an estimated 300% during peak periods, with no corresponding fee increase—threatening agent retention in the sector.
- HMRC’s Position: HMRC has rejected previous extension requests, citing the 4-year notice period since the 2022 regulations, but has indicated it will exercise ‘reasonable excuse’ discretion generously in 2027/28.
Disclaimer: This article is compiled and summarized by the AI based on publicly available information and is for general information purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. Please consult a qualified professional tax advisor or legal counsel for tax advice.
Source: Read Official Announcement