On Tuesday we said this change arrives without anyone deciding it. Today, the exception
This edition went out without the standing disclosure that sits at the foot of every editor's note: that the view is the editor's own, that the note begins as an AI draft and is edited and answered for by a named human, and that every analyst desk in this paper runs on models built by Anthropic, whose industry we cover. That disclosure exists so readers can weigh what we publish, and it should never be missing. It was a production error rather than a decision, made while a late section was appended to the note, and it was found the following evening. The disclosure has been restored, along with the editor's signature, which was left in the wrong form and the wrong place in the same edit. Nothing else in the edition has changed and no claim in it is affected.
Three days ago Edmund Frye closed our Tuesday edition with a line I have not stopped thinking about. The last time Britain took routine work off its lawyers, he wrote, it did it deliberately: argued about it for a decade, passed an Act, appointed somebody to keep the score. This time it arrives as a software release, and nobody is counting.
Yesterday we ran the numbers behind that and found the same hole from the other side. Britain has two national surveys of how far this technology has got into working life and they cannot be read against each other.
Today is the exception to both, and it is why we are running it.
Making Tax Digital for income tax was decided in public. It has an Act behind it, a start date of 6 April this year, a National Audit Office investigation, a Public Accounts Committee report, ministers answering written questions about it, and a population HMRC has counted: more than 864,000 sole traders and landlords. Nobody drifted into this. It was chosen, argued over for a decade, and delayed four times before it landed.
And the thing that was chosen, among all the other things, was that the state would not build the tool. Taxpayers would buy it, or take it at no charge, from companies. HMRC says so on its own campaign site. A minister said so in a written answer last November. The Public Accounts Committee said, back in 2023, that HMRC was increasing the burden on taxpayers by asking them to pay for third party software.
So this is not a story about a gap in the record. It is the one case this week where the record is complete and nobody has read it.
Two things about how we are handling it, because you are entitled to know. On the evening of 2 September we wrote to HMRC asking who is paying what for this software, and gave them until 11 September. We made a freedom of information request the same night, which carries its own statutory clock and falls due on 30 September. We also put questions to Sage. Nothing had been answered when this went out. We asked before publishing rather than after, and we will print whatever comes back in full, including the parts that embarrass us. Where a piece here says we cannot find something, it means we looked and did not find it. It does not mean nobody has it.
The other thing is a correction to myself. Preparing this edition I subtracted one HMRC figure from another and produced a number that meant nothing, one day after we published a piece warning about exactly that. It did not reach you. It nearly did.
THE PLAYBOOK
If you are a sole trader or a landlord, four things worth checking before HMRC signs you up for you.
One. Check whether you are actually in scope, because the test is not what most people assume. HMRC calls it qualifying income. It is your total income from self-employment and property added together, assessed on gross income before you deduct expenses, which HMRC also calls turnover, and it is based on the return you filed for the previous year. What does not count matters just as much. Employment income through PAYE, your share of partnership profit, dividends including from your own company, the State Pension and private pensions are all excluded. So a salaried person with a flat to let counts the rent and not the salary. Above 50,000 pounds on the 2024 to 2025 return put you in from 6 April this year. The threshold falls to 30,000 pounds from April 2027 and to 20,000 pounds from April 2028, so a good many people who are outside this today will not be for long. HMRC's guidance page is called Work out your qualifying income for Making Tax Digital for Income Tax.
Two. If you have not signed up, HMRC has said it will begin doing it for you from this month, in stages. That is not the same as being taken care of. Enrolment gives you the duty and stops there. It does not choose your software, keep your records or file anything. Signing yourself up buys you the one thing worth having, which is time to choose.
Three. Products that cost nothing are real, and they are conditional. Three questions before you commit to any of them. Does it cover both the quarterly updates and the end of year return, or only one. Is it free for a full accounting period, or free for a trial. And what exactly moves you onto a paid plan, since that is the answer nobody puts on the front page. In written evidence to a Commons committee in 2023, one firm told MPs that HMRC's own list included products described as free that were not.
Four. If using software is genuinely not reasonable for you, exemption exists. HMRC can exempt people who are digitally excluded, and that is a real route rather than a courtesy. If that is your situation, ask about it early rather than discovering the penalty regime instead.
And one thing we could not tell you, which is the reason we wrote to HMRC last night. Nobody publishes how many of the 864,000 people now inside this are paying for the software they are required to have. If HMRC sends us the number, you will see it here.
— M.
This note is mine: the view, and the call to run it. It begins as a draft, drawn from work the AI and I have researched and argued out together, the same way every desk in this paper is made, and I answer for every line because I read every line. Those desks run on models built by Anthropic, one of the labs sitting on the very scoreboard we report, so we tell you plainly: we cover this from inside it.
The founding question asked directly. Where does the gain from a modernised tax system go, and who was made responsible for making sure it arrived.