Fewer than 3 in 10 register for HMRC's Making Tax Digital shake-up

April 10, 2026
aibusinessopen-sourcegovernment

Slow sign‑ups

It has been reported that fewer than three in ten of the people required to join HMRC’s new Making Tax Digital (MTD) income‑tax scheme have actually signed up. HMRC told The Register that just over 219,000 people have registered so far — up from about 37,000 in mid‑February — out of roughly 780,000 sole traders and landlords who must move from annual to quarterly software‑based reporting this tax year. Slow start? You could say that. Or stubborn resistance. Take your pick.

Deadlines and penalties

Those affected have until August 7 to file their first quarterly report. It has been reported that HMRC will write to those who miss that date but will not levy penalties during the 2026–27 tax year; after that, the department will reportedly impose a £200 fine after four late submissions. It has also been reported that about three‑quarters of this group use agents such as accountants, who tend to be highly aware of the change — so the real test will be whether advisers can herd the rest before enforcement kicks in.

Costs, scope and what’s coming

It has been reported that MTD requires the use of HMRC‑approved software — some free, many paid — and HMRC previously estimated adoption would cost around £350 upfront and then about £115 a year. The scheme is only getting bigger: the threshold drops to £30,000 in April 2027 (pulling in roughly 970,000 more people) and to £20,000 in April 2028 (another ~975,000). More people, more software, more support calls. Fun times?

The wider picture

Why the push now? Partly efficiency, partly the pleasure of quarterly bookkeeping. It has been reported that HMRC says MTD will give sole traders and landlords a more real‑time view of their finances and free them up to focus on running their businesses. Medieval accountants might nod in approval — Lady Day, quarter days and all that — but for many today it feels like being nudged into a new era of tax admin whether they like it or not. Will letters and a looming fine change minds? Watch this space.

Sources: The Register