Despite launching two months ago, data shows that just over half of the 216,000 unrepresented taxpayers affected by Making Tax Digital have still not registered.
These individuals are being urged to do so as soon as possible, before the first MTD quarterly update is due.
What is Making Tax Digital?
MTD is part of a long-term government plan to modernise and bring the tax system closer to real time.
Eventually, all businesses will need to keep digital records using MTD compatible HMRC-approved software and submit their figures every quarter.
The most recent step is MTD for Income Tax Self-Assessment (ITSA), which started on the 6th of April 2026.
The year that it becomes mandatory depends on earnings, so if you are a sole trader or a landlord, you will be affected from:
- 6th April 2026, if you have an annual business or property income of more than £50,000
- April 2027, if you have an annual business or property income of more than £30,000
- April 2028, if you have an annual business or property income of more than £20,000
MTD responsibilities include:
- Keeping digital records of your income and expenses using HMRC-compatible software.
- Submitting quarterly updates to HMRC on: 7th August, 7th November, 7th February and 7th May. These will give you an estimated tax bill as you go along and do not trigger payments.
- Completing a final end-of-year declaration.
Need help deciding between Limited or Umbrella? We are happy to help- give Sophie a call on 01442 795 100 or email sophie.lewis@dolanaccountancy.com
Less Than Two Months to Go Until First Quarterly Update Deadline
The Low Incomes Tax Reform Group (LITRG) is urging taxpayers who have not yet checked whether they need to use MTD from 2026/27 to:
- Find out whether they meet the criteria that makes them legally required to sign up for MTD now – this means having had more than £50,000 of gross income from self-employment and/or rental income in the 2024/25 tax year.
- Find out whether they can obtain an exemption from MTD – HMRC has set out several permanent and temporary exemptions from MTD5.
- Choose the right commercial software to comply with HMRC’s reporting requirements – HMRC are not providing software for MTD, it will be necessary to use third-party commercial software for keeping digital records, making quarterly returns and for filing a tax return.
If you need further help or advice, we have our own Making Tax Digital Hub, where you might find the following articles useful:
- What Do I Need to Know About Making Tax Digital?
- Making Tax Digital: Income Tax Quarterly Updates Explained
- How to Choose the Right Software for Making Tax Digital
- Making Tax Digital for Limited Companies: What You Need to Know
- Do eBay Sellers Need to Comply With Making Tax Digital?
For more information, please contact Jaime on 01442 795 100 or email jaime.thorpe@dolanaccountancy.com.
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