Purpose
Making Tax Digital for Income Tax is now in force, but some sole traders and landlords who should be using the system have still not signed up.
From 6 April 2026, MTD became compulsory for individuals with qualifying income of more than £50,000 from self-employment and property, based on their 2024/25 tax return. The first quarterly update was due by 7 August 2026.
What happens if you have not signed up?
HMRC is beginning to take a more active approach to taxpayers who should be within MTD but have not registered.
However, anyone affected should not wait for HMRC to act. HMRC's current guidance remains clear: taxpayers who are required to use MTD should sign up now, or ask their accountant or tax agent to do it for them.
Signing up is only part of the process. You must also use compatible software, maintain digital records and submit quarterly updates.
If you join MTD partway through the tax year, you may need to bring your digital records up to date from the start of the tax year before submitting outstanding updates.
Missed the first deadline?
HMRC has confirmed that no penalty points will be issued for late quarterly updates during the 2026/27 tax year.
That does not remove the requirement to comply. Outstanding quarterly updates still need to be submitted before the annual tax return can be completed through MTD. Normal penalties for a late tax return or late payment can still apply.
More people will be affected
The MTD qualifying-income threshold reduces to
- More than £30,000 from April 2027
- More than £20,000 from April 2028
Key takeaway
If you are self-employed or receive property income, check whether MTD applies to you now. If you have missed registration or the first quarterly update, dealing with it promptly should make correcting the position considerably easier.
