HMRC Urges Taxpayers to Register for Making Tax Digital

The HM Revenue and Customs has issued an urgent alert for sole traders and landlords with an annual turnover exceeding £50,000 to register for the Making Tax Digital (MTD) for Income Tax system by August 7, 2026. The initiative replaces traditional annual self-assessment tax returns with four quarterly digital submissions and a final end-of-year declaration. While this first cohort was required to start keeping digital records on April 6, 2026, registration numbers remain low.

Data obtained via a Freedom of Information request by Azets showed that only 282,637 of the 864,000 required individuals had registered as of May 20, 2026. Although HMRC later stated that over 400,000 customers have since signed up, the agency continues to urge unregistered taxpayers to comply. To facilitate the transition, the Chancellor announced that no penalties will be applied for late quarterly submissions during the 2026/27 tax year, though a points-based penalty system will begin next year.

Experts warn that delayed registration could create significant administrative burdens, potentially forcing taxpayers to file up to nine returns within a single year to catch up. The registration mandate will expand in the coming years, with income thresholds dropping to £30,000 in 2027 and £20,000 in 2028.