MTD for Income Tax is now live — but three-quarters of those required haven’t signed up

A few weeks ago I wrote about Making Tax Digital for Income Tax and what the 6 April 2026 start date would mean for sole traders and landlords above the £50,000 income threshold.

That date has now passed. And the figures that followed make for interesting reading.

Where things stand

According to HMRC’s own data, only around 218,000 of the 864,000 people required to sign up had done so by mid-April — roughly one in four. The remaining three-quarters have not yet registered, despite the scheme now being live.

This has been widely reported, including in the Financial Times and City AM, and reflects a pattern HMRC has seen before: uptake tends to accelerate as the first filing deadline approaches rather than at the formal start date.

The good news is that HMRC has confirmed there are no penalty points for missed quarterly updates during 2026–27. This is a genuine concession for the first year, though it is worth being clear: submissions are still required, and the absence of penalty points does not mean the obligations don’t apply.

What the deadlines actually look like

• Digital record-keeping must be in place from 6 April 2026 — this is not a future obligation
• The first quarterly update covers 6 April to 5 July 2026, and is due by 7 August 2026
• A final declaration (replacing the Self Assessment return for MTD users) is due by 31 January 2028 for the 2026–27 tax year
• From 2027–28, a points-based penalty system applies — four missed deadlines triggers a £200 fine, with further fines for each subsequent miss

The threshold drops to £30,000 in April 2027 and £20,000 in April 2028, so the number of people affected will grow considerably over the next two years.

What to check now if you’re in scope

If your combined gross income from self-employment and/or UK property exceeded £50,000 in the 2024–25 tax year, MTD applies to you from this tax year. The practical steps are:

• Sign up via HMRC’s online service if you haven’t already
• Make sure you have HMRC-compatible software in place (HMRC does not provide its own)
• Ensure income and expenses are being recorded digitally from 6 April — not just from when you sign up
• Check that you, or your adviser, are clear on the quarterly update deadlines

If you’re not sure whether MTD applies to your situation, or would like help getting the right setup in place ahead of the August deadline, you can get in touch here.