Tax technology has stopped being optional. VAT records must already be digital with digital links between systems. Making Tax Digital for income tax went live in April 2026. All Companies House accounts must be filed in software-generated iXBRL from 1 April 2028. And an e-invoicing mandate lands in 2029. Each has a data problem behind it.
Where the mandates already are
VAT. Every VAT-registered business must keep digital records and file through software. The requirement people still fail is the digital link: data must move between programs electronically, without manual intervention. Linked spreadsheet cells, emailing a file, CSV or XML import and export, and API transfers all qualify. Cut and paste does not. Once data enters the software maintaining the electronic account, every further transfer or modification must use digital links.
Income tax. Making Tax Digital for income tax went live in April 2026 for the highest income band, with the threshold dropping to £30,000 in April 2027 and £20,000 in April 2028. Quarterly updates replace the single annual return as the rhythm of compliance. Our guide to MTD for sole traders covers the mechanics.
Corporation tax. iXBRL tagging of accounts and computations has been required since 2011 — a PDF has never been a valid filing.
What is coming, and when
- 1 April 2028 — Companies House. All accounts filings must be made by commercial software in iXBRL. The web filing route, the paper route and the joint HMRC/Companies House service all close. Small and micro companies must file a profit and loss account, with an announced option to opt out of publishing it — the mechanism for that opt-out has not yet been set out;
- 2029 — e-invoicing. A UK mandate for VAT invoices was announced, with the roadmap set at Budget 2026. The point most businesses have not absorbed: a PDF emailed to a customer is not an e-invoice. Structured data is;
- 1 January 2027 — ICTS. The International Controlled Transactions Schedule, an annual standardised return of cross-border related party transactions, is intended for accounting periods beginning on or after that date. The regulations were still to be laid as at late 2026, so build for the shape rather than the fields.
The reporting regimes that are really data projects
Three obligations arrived recently that look like tax compliance and behave like systems work.
CARF. The Cryptoasset Reporting Framework took effect on 1 January 2026. Cryptoasset service providers must register with HMRC by 31 January 2027 and file first reports between January and May 2027, covering calendar year 2026 — which means the data had to be captured from January 2026, not from the filing date. The UK went beyond the international minimum by requiring reporting on UK-resident users too.
Transfer pricing documentation. Master file and local file requirements apply to groups within country-by-country reporting, at €750 million of consolidated revenue. The files must exist, not be assembled on request.
Plastic packaging tax, CBAM and the other measured taxes. The UK carbon border adjustment mechanism starts on 1 January 2027, and liability is the sectoral carbon price multiplied by the embodied emissions of imported goods. That figure comes from your supplier, not from HMRC — which makes it a procurement and data problem long before it is a tax return.
What actually goes wrong
In our experience the failures cluster in four places, and none of them is the tax calculation.
A manual step in the middle. A process that is digital at both ends and manual in the middle fails the digital link test, and the break is usually a spreadsheet someone rekeys from a report.
Data that was never captured. CARF, CBAM and ICTS all require information that ordinary finance systems do not hold — tax residence, embodied emissions, transaction categories. Nobody discovers this at the point of filing; they discover it a year late, with a reporting period already running.
Tagging treated as formatting. iXBRL has three separate questions: is the syntax valid, is the tagging correct, and are the accounts correct. Passing a software validation check answers only the first. A tagging error that understates net assets propagates into credit scores and supplier assessments, and correcting the source does not correct everything downstream.
Reconciliation left to the year end. Where the return and the accounts are built from different extracts, differences appear late and get argued about rather than explained.
Building for it
The useful sequence is unglamorous.
Map the actual data flow first, system by system, and mark every point where a human touches the data. Those points are your digital link failures and your error sources, and the map is worth more than any software decision.
Then fix the capture rather than the output. If an obligation needs a field your ledger does not hold — tax residence, a commodity code, a supplier's emissions figure — the answer is to capture it at the point of transaction, not to reconstruct it quarterly. This is the single highest-return change available, and it is usually a small configuration job done early rather than a large remediation job done late.
Then automate the filing, not the judgement. Software should assemble and submit; it should not decide a liability question. Where a rate or a treatment is uncertain, that is an advice question that happens to arrive through a system.
And align the chart of accounts with what you have to report. Academy trusts have a worked example of this in the DfE chart of accounts, which maps directly to the returns — the same principle applies to any business with a recurring standardised filing.
Where it pays
The honest case for investment is not efficiency. It is that several of these regimes carry penalties for late or inaccurate filing that have nothing to do with whether the underlying tax was right — points and £200 penalties for VAT, daily penalties for CARF registration failures, and validation rejections at Companies House. Those are process costs, and process is what technology fixes.
Acumon advises on tax compliance systems and the data behind them through Making Tax Digital, iXBRL services and cloud accounting work, with process automation where the flow itself is the problem — see also our guide to iXBRL tagging. If any part of your VAT process involves copying figures between files, that is the link to close first.