Is Making Tax Digital for Income Tax on your to-do list? It’s something you won’t be able to put off for much longer!
The first quarterly deadline has passed (7 August). This first big test of MTD revealed that over half a million people who should have registered haven’t. So, HMRC is taking action.
MTD is not going away.
HMRC’s auto-enrolment approach
MTD for Income Tax launched in April 2026 for sole traders and landlords with qualifying income over £50,000.
HMRC expected around 864,000 taxpayers to be involved. So far, more than 570,000 have signed up, while over 436,000 have successfully submitted their first quarterly update. (Yorkshire Accountancy News)
From September, it will begin enrolling those it believes should already be using MTD but have not registered. The process will happen in stages over the coming months.
Please don’t ignore Making Tax Digital
Did your 2024/25 employment and/or property income exceed £50,000? You should already be using MTD for Income Tax. Importantly, HMRC considers gross income before expenses, not your profit.
If you haven’t registered for MTD yet but should, it’s best to be proactive rather than ignore MTD and wait for HMRC to do it for you.
‘We’ve registered many of our clients for MTD for Income Tax. We know the process and requirements. You’ll need compatible software, digital records and a system to keep your income and expenses up to date,’ advises Ugne Jonaityte, Senior Accountant at re:accounts Chartered Accountants in Stevenage. ‘You’ll also need to send quarterly updates to HMRC – it’s this first deadline that led to HMRC’s auto-enrolment policy.’
Have you missed the August deadline?
Don’t panic – but don’t ignore it either.
The first quarterly update was due on 7 August 2026 and covered the first three months of the tax year. However, you have some breathing space.
HMRC has confirmed that penalty points will not be applied for late quarterly updates in the first MTD tax year, 2026/27. Be careful – this flexibility does not extend to late tax returns or missed tax payment deadlines!
‘It’s important to remember that the longer you wait to get on board with MTD, the bigger the catch-up workload involved,’ adds Ugne.
Do the next phases of MTD for income tax affect you?
HMRC’s automatic sign-up programme applies to taxpayers who are already required to use MTD for 2026/27.
If you’re not required to join until April 2027 or April 2028, you’re still expected to sign up yourself at the right time.
The thresholds are being phased in:
- More than £50,000 qualifying income – MTD from April 2026.
- More than £30,000 – MTD from April 2027.
- More than £20,000 – MTD from April 2028.
HMRC may not be chasing you at the moment, however it’s worth getting prepared now.
Should you be using MTD?
If you think you should already be using Making Tax Digital but haven’t registered, now is the time to act. Talk to the friendly tax experts at re:accounts Chartered Accountants in Stevenage.
It’s less stressful than waiting for HMRC to sign you up and then work out what happens next.
