Question to the HM Treasury:

To ask His Majesty's Government how many individuals were involved in testing Making Tax Digital during the pilot in 2024–25, and how many tax returns they expect to be filed by April 2026.

Taxpayers within Making Tax Digital (MTD) for Income Tax will have one month from the end of each update period to submit their quarterly update. These updates are not the same as tax returns. They are simple, unadjusted summaries of income and expenditure, acting as a snapshot of quarterly trading activity. They will be populated automatically through software and can be submitted easily. This process has been designed to be simple for users and quick to complete.

Although MTD for Income Tax introduces changes to the reporting ofincome and expenditure with quarterly updates, it does not change the frequency or timing of tax payments.

HM Revenue & Customs (HMRC) has published a suite of guidance including interactive guidance to help taxpayers understand if and when they need to use MTD for Income Tax. This will be supplemented by help provided through a taxpayer’s agent or software provider. HMRC is engaging taxpayers affected by the changes directly and through webinars, industry engagement and marketing activity.

HMRC has published guidance about software on its newly revised Software Choices pages, making it easier for taxpayers to choose the rightsoftware for both their budget and their needs. Free and low-cost software options are already listed. Further products will be added to these pages as they become available. Where a taxpayer needs to change software during the tax year, they will need to import their digital records into the new compatible software. HMRC’s Minimum Functionality Standards for MTD software requires developers to build functionality into their products to enable users to export their data.

The 2024/25 Private Beta testing phase of MTD for Income Tax runs to31 January 2026. 226 individuals signed up for the testing. This enabled HMRC to test a range of core user journeys, identify issues and implement improvements. Currently, there are around 3,500 taxpayers signed up for the public testing phase of MTD for Income Tax in the 2025/26 tax year.

Under the requirements specified in HMRC’s Minimum Functionality Standards for Making Tax Digital (MTD) software, using software that is compatible with MTD for Income Tax should enable users to completethe entirety of their obligations within Income Tax Self-Assessment.