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Making Tax Digital Registrations Continue Ahead of First Deadline
June 18, 2026
Making Tax Digital for Income Tax has been live since 6th April 2026, but many eligible taxpayers have yet to sign up.
HM Revenue & Customs (HMRC) estimates around 864,000 sole traders and landlords need to use the new system this year.
The latest figures published in early June by the Institute of Chartered Accountants in England and Wales (ICAEW) show around 280,000 registrations. This includes approximately 30,000 people who joined voluntarily, despite not yet being required to use the system.
This leaves a gap of at least 584,000 against HMRC’s estimated population. The number of people required to register but yet to do so may be higher because the total includes voluntary sign-ups.
Qualifying sole traders and landlords are now required to register for Making Tax Digital
Who needs to use Making Tax Digital?
The first phase applies to sole traders and landlords whose qualifying income exceeded £50,000 in the 2024/25 tax year.
Qualifying income is gross income from self-employment and property before expenses are deducted. Income from both sources is added together when HMRC assesses whether someone meets the threshold.
Those affected must use compatible software to keep digital records and send quarterly updates to HMRC. They’ll still need to submit their final tax information after the end of the year.
The first quarterly update is due by 7th August 2026.
Many registrations are being handled by tax agents
Around two-thirds of registrations so far have been completed through accountants or tax agents.
Separately, HMRC estimates that around 35% of the wider population expected to fall within Making Tax Digital over time (across all three phases), don’t have an accountant. Many people within this group aren’t currently using commercial accounting software, which means they will need to make bigger changes before they can meet the requirements.
HMRC has continued contacting people it believes fall within the new rules. Its latest letters are being sent to taxpayers whose late or amended 2024/25 returns took them above the £50,000 threshold.
Taxpayers remain responsible for checking whether they need to sign up, even if they haven’t received a letter.
What does MTD mean for clients of Independent Financial Planners?
Making Tax Digital is a tax reporting requirement, so it’ll usually be handled by the taxpayer or their accountant. Independent financial planners aren’t automatically responsible for keeping digital records or submitting quarterly updates.
However, some planners’ clients may be directly affected, particularly those with rental properties or self-employed income. Clients with several income sources need to check how much comes from property or sole trading.
Pension income and dividends don’t count towards the qualifying income threshold. Savings interest and capital gains are also excluded.
What happens next?
There won’t be penalty points for late quarterly updates during 2026/27. Taxpayers must still keep digital records, submit all four quarterly updates and meet their wider reporting obligations.
This penalty relief doesn’t extend to the year-end Final Declaration, which replaces the previous self assessment return. For 2026/27, this is due by 31st January 2028, and late submission can still result in penalty points.
The qualifying income threshold will fall to £30,000 from April 2027. It’ll reduce again to £20,000 from April 2028.
For more information, read HMRC’s Making Tax Digital for Income Tax guidance
Speak to an independent financial planner
Important information
The information on this page is for general guidance only and does not constitute personal financial advice. We recommend seeking advice tailored to your individual circumstances before making financial decisions.