Imagine having to file nine tax returns a year just to keep your small business afloat. Sounds absurd, right? Well, that’s the reality millions of self-employed individuals, including myself, are about to face. Thanks to the seemingly innocuous Making Tax Digital scheme kicking in this April, the days of a single annual tax return are over. But here’s where it gets controversial: instead of simplifying taxes, this system is piling on bureaucracy, leaving us with less time to actually earn a living. And this is the part most people miss: while big corporations like AstraZeneca, Shell, and HSBC continue with their single annual return, small businesses—sole traders, landlords, and even plumbers—will be drowning in quarterly filings. For instance, I’ll be filing nine returns annually because I’m VAT-registered, while a friend who runs a plumbing business with her partner will file a staggering 19. Think about that: 19 returns a year!
Now, you might think, who cares about someone else’s tax woes? But consider this: every hour spent filling out forms is an hour we’re not spending on productive work. That’s millions of hours lost across over 4 million self-employed people—hours that could’ve been used to grow businesses, create jobs, or contribute to the economic growth politicians love to talk about.
To be fair, Making Tax Digital was first proposed by George Osborne in 2015, promising a “revolutionary simplification” of tax collection. Fast forward to 2024, and we’re left with quarterly and annual returns—six years late and far from simplified. Cheers, George. No wonder cynics joke that politicians think they need our money more than we do.
Here’s the kicker: the threshold for this quarterly filing nightmare is dropping. Starting next April, anyone earning over £30,000 will be roped in, and by 2028, it’ll be £20,000. That’s not just the highly paid—builders, drivers, electricians, and even allotment owners are in the crosshairs. Miss a filing? Expect fines.
You’d think this would be front-page news, but the mainstream media has been eerily quiet. Maybe because most employees won’t be affected—yet. But history tells us temporary taxes have a way of sticking around (looking at you, income tax, introduced for the Napoleonic Wars and still here 200+ years later).
Lindsey Wicks from the Institute of Chartered Accountants calls this the most significant change to income tax in three decades. Nimesh Shah, CEO of Blick Rothenberg, admits the government’s logic—reducing the £47 billion tax gap—has merit, but they’ve completely overlooked the administrative burden on taxpayers. Jonathan Butters from AEL Markhams adds that many will turn to accountants, driving up costs without any real benefit.
Speaking of costs, the software required for Making Tax Digital isn’t cheap. I’ve gone from a 10-minute DIY filing to paying £19.20 monthly to third-party firms—a service I never asked for. And guess what? The two biggest providers, QuickBooks and Xero, are foreign companies. So, millions of self-employed Brits are sending money overseas just to comply with British taxes. After the Post Office’s Horizon software debacle, you’d think HMRC would’ve pushed for homegrown solutions.
But maybe that’s too much to ask from a government that seems out of touch with the realities of running a small business. Unlike taxpayers, private sector customers vote with their wallets. If you disappoint them, they walk away. Meanwhile, the latest survey shows rising scepticism about how politicians spend our money—19% want taxes and spending cut, the highest since 1983.
On a lighter note, my accountant once joked, ‘If you ever feel nobody cares about you, try missing a VAT payment. You’ll soon find out someone does.’ We laughed, but it’s a bitter truth.
So, here’s the question: Is Making Tax Digital a necessary evil for a fairer tax system, or just another burden on the self-employed? Let me know your thoughts in the comments—I’d love to hear if you agree, disagree, or have your own tax horror stories to share.
