Making Tax Digital (MTD) for Income Tax became mandatory from 6 April 2026 for sole traders and landlords with qualifying income above £50,000. Yet reports suggest that around three quarters of affected taxpayers had not registered for the regime shortly after it came into force.
With the first quarterly filing deadline now less than two months away, the figures raise questions about how prepared taxpayers are for one of the most significant changes to personal tax administration in recent years.
Thousands Yet to Register Despite MTD Going Live
MTD for Income Tax requires affected taxpayers to maintain digital records and submit quarterly updates to HMRC using compatible software.
The first reporting period runs from 6 April to 5 July 2026, with the first quarterly update due by 7 August 2026.
Financial Times reporting based on HMRC data indicated that only around one quarter of taxpayers expected to enter the regime had registered shortly after mandation began, leaving approximately three quarters yet to sign up.
While there was no requirement for taxpayers to complete registration by 6 April itself, the low registration numbers suggest many affected individuals may still be assessing whether they fall within the new rules, selecting software or preparing their record-keeping processes.
The move represents a major shift away from the traditional annual Self Assessment cycle. Instead of relying solely on a year-end tax return, taxpayers within MTD are now expected to maintain digital records throughout the tax year and provide HMRC with regular updates.
Although HMRC has confirmed that penalty points will not apply for late quarterly updates during the first year of mandation, the regime is now fully operational and affected taxpayers are expected to comply with the new requirements.
The government plans to extend MTD further, with taxpayers earning more than £30,000 expected to join from April 2027, followed by additional expansion in later years.
What Affected Taxpayers Should Do Now
Individuals who receive income from self-employment, property letting or both should review whether their qualifying income exceeds the £50,000 threshold and whether they fall within the scope of MTD for Income Tax.
Where the rules apply, taxpayers should ensure they have registered for the service, selected compatible software and established processes for maintaining digital records throughout the year.
Those who have not yet taken action still have time to prepare before the first quarterly update deadline on 7 August. However, leaving registration, software selection and record migration until the last minute could create avoidable compliance difficulties.
The first MTD filing deadline will provide an early indication of how successfully taxpayers have adapted to quarterly reporting and whether HMRC’s long-term digitalisation programme is achieving its intended objectives.
Author
Gill Laing is a qualified Legal Researcher & Analyst with niche specialisms in Law, Tax, Human Resources, Immigration & Employment Law.
Gill is a Multiple Business Owner and the Managing Director of Prof Services Limited - a Marketing & Content Agency for the Professional Services Sector.
