Making Tax Digital and CIS: will it delay my refund?

By Patrick Roper ACA, ICAEW chartered accountant. Last reviewed 1 November 2026. Figures next checked by 1 December 2026.

Making Tax Digital does not change how much you are owed; it changes when and how the figures reach HMRC. If your gross pay in 2025/26 was over £30,000, quarterly updates start from 6 April 2027 and your refund still arrives after the year-end return. The one documented delay so far hit people who volunteered for the 2025/26 trial: in June 2026 an accountant reported a £4,000 CIS refund held with "no timescale" because the repayment had been passed to the MTD team. Do not join early.

Who is in, and when

The test is your gross self-employed income, before expenses and before the contractor's deduction, on the tax return two years before the start date. Over £50,000 in 2024/25 meant April 2026. Over £30,000 in 2025/26 means6 April 2027. Over £20,000 in 2026/27 means 6 April 2028. A full-time subcontractor on 20% deductions is usually over £30,000 gross, so most full-time trades join in April 2027. HMRC writes to you after it has reviewed the 2025/26 return, which is why filing that return early is useful twice over.

What changes

• Four quarterly updates a year, sent through software, each a running total of income and expenses. No tax is calculated and nothing is paid or refunded on them.
• A year-end return in place of the Self Assessment form you use now. This is where the CIS deductions are set against the tax due and the refund is calculated.
• Pre-filled deductions. HMRC intends to fill in the CIS deductions from contractors' monthly reports. You check them against your statements. A contractor who reported late or not at all leaves a gap you have to fill.
• Digital records. The income and expense figures must be kept in software or a spreadsheet linked to it. Photos of statements still work as evidence; the totals have to be in the records.

What does not change

The arithmetic. Deductions are advance payments; the return works out the tax and National Insurance actually due; the difference comes back. The personal allowance, the expenses you can claim and the 31 January payment date for any balance owed all stay. The refund still arrives once a year, after the year-end return.

The delay that has already happened

On 2 June 2026 an accountant posted on AccountingWEB that a client signed up to the 2025/26 MTD trial had filed a return showing a £4,000 CIS refund, and that the repayment "has not got paid out as it has passed to the MTD team", who said there was "no timescale as to when the fix will be implemented". A reply quoted HMRC's line that it "may need a further 12 weeks after 29 May 2026 to issue your repayment". In a separate thread another accountant described withdrawing a subcontractor from the trial so that his refund could be paid through the ordinary route. These are trial problems, reported by practitioners rather than confirmed by HMRC, and they are the only evidence there is. The sensible reading is that the first mandatory year, 2026/27, may have teething problems of its own.

What to do now

1. File the 2025/26 return as early as you can. It settles this year's refund and tells HMRC which group you are in.
2. Keep every payment and deduction statement, by photo if nothing else. From 2026/27 you will be checking HMRC's pre-filled figure against them.
3. Do not volunteer for the trial if a refund is due to you.
4. Decide who sends the quarterly updates: you, through software, or an accountant on your behalf. Our CIS Year covers the sign-up, this year's return and refund, and the four quarterly updates for £349, paid when you approve the return with the refund figure shown.