Fewer than 3 in 10 register for HMRC's Making Tax Digital shake-up
(2026/04/10)
- Reference: 1775809807
- News link: https://www.theregister.co.uk/2026/04/10/mtd_hmrc/
- Source link:
Fewer than three-tenths of those required to sign up for quarterly software-based Making Tax Digital (MTD) reporting for the latest tax year that started this month have done so, according to HM Revenue & Customs.
The UK tax collector told The Register that more than 219,000 people have signed up to MTD for income tax, up from more than 37,000 in mid-February with thousands joining each week.
HMRC spares 661 from Making Tax Digital as rollout nears [1]READ MORE
This is around 28 percent of the 780,000 sole traders and landlords required by the government to move from annual to quarterly tax reporting with approved software for the tax year starting April 6.
Those affected have until August 7 to submit their first quarterly report through the system. HMRC said it saw engagement accelerate rapidly in the run-up to the first reporting date when it introduced MTD for businesses paying value-added tax (VAT) in 2019.
It plans to write to those who miss the August 7 deadline but will not penalize late submissions in the 2026-27 tax year, after which it will fine people [2]£200 after four late submissions .
[3]
The government requires sole traders, who run businesses without a company structure, and landlords who made more than £50,000 in 2024-25 to sign up to MTD this year.
[4]
[5]
"Making Tax Digital will make it easier for sole traders and landlords to get their tax right by providing a more real-time overview of their finances, freeing up their time to focus on growing their business," an HMRC spokesperson told The Register .
The spokesperson added that HMRC ran marketing and information campaigns about the changes, and around three-quarters of this year's group have agents such as accountants who have very high awareness of the requirements.
[6]HMRC hands £473M Fujitsu migration deal to AWS after competition melts away
[7]UK tax collector plans £2B tech binge as legacy systems refuse to die
[8]UK Digital Services Tax raises £800M from global tech giants
[9]UK tax collector falls short on digital efficiency, watchdog says
In April 2027, the government will lower the MTD boundary to £30,000, pulling in 970,000 more sole traders and landlords, and then to £20,000 in April 2028, adding a further 975,000.
Those affected have to use [10]HMRC-approved software , with some free options but many paid-for, rather than the free online system run by the tax collector through the GOV.UK website.
[11]
HMRC previously estimated the change would [12]cost people about £350 to adopt and then £115 annually.
But [13]why April 6 ? In the medieval era, the English New Year started on March 25, also known as Lady Day to mark the Annunciation of Our Lady. People used Lady Day and the other quarter days of Midsummer, Michaelmas, and Christmas to settle accounts such as rents.
In 1752, England dropped 11 days from September to catch up with Pope Gregory XIII's calendar changes, which were adopted by most of Europe in 1582. To avoid being short-changed by the shorter year, the Treasury pushed the start of the tax year back to April 5, with a further day added in 1800.
[14]
Now, through MTD, HMRC is arguably reintroducing the custom of quarter days. ®
Get our [15]Tech Resources
[1] https://www.theregister.com/2026/02/20/making_tax_digital_exemptions/
[2] https://www.gov.uk/guidance/penalties-for-making-tax-digital-for-income-tax
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/publicsector&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2adjKQlngKcQoSPT2cPHSXAAAAJU&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/publicsector&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44adjKQlngKcQoSPT2cPHSXAAAAJU&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/publicsector&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33adjKQlngKcQoSPT2cPHSXAAAAJU&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[6] https://www.theregister.com/2026/03/25/hmrc_fujitsu_contract_aws/
[7] https://www.theregister.com/2026/01/28/hmrc_tech_pipeline/
[8] https://www.theregister.com/2025/11/28/uk_digital_services_tax/
[9] https://www.theregister.com/2025/11/07/uk_tax_collector_falls_short/
[10] https://www.gov.uk/guidance/choose-the-right-software-for-making-tax-digital-for-income-tax
[11] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/publicsector&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44adjKQlngKcQoSPT2cPHSXAAAAJU&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[12] https://www.gov.uk/government/publications/extension-of-making-tax-digital-for-income-tax-self-assessment-to-sole-traders-and-landlords/making-tax-digital-for-income-tax-self-assessment-for-sole-traders-and-landlords
[13] https://theconversation.com/why-the-uk-tax-year-begins-on-april-6-its-a-very-strange-tale-57247
[14] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/publicsector&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33adjKQlngKcQoSPT2cPHSXAAAAJU&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[15] https://whitepapers.theregister.com/
The UK tax collector told The Register that more than 219,000 people have signed up to MTD for income tax, up from more than 37,000 in mid-February with thousands joining each week.
HMRC spares 661 from Making Tax Digital as rollout nears [1]READ MORE
This is around 28 percent of the 780,000 sole traders and landlords required by the government to move from annual to quarterly tax reporting with approved software for the tax year starting April 6.
Those affected have until August 7 to submit their first quarterly report through the system. HMRC said it saw engagement accelerate rapidly in the run-up to the first reporting date when it introduced MTD for businesses paying value-added tax (VAT) in 2019.
It plans to write to those who miss the August 7 deadline but will not penalize late submissions in the 2026-27 tax year, after which it will fine people [2]£200 after four late submissions .
[3]
The government requires sole traders, who run businesses without a company structure, and landlords who made more than £50,000 in 2024-25 to sign up to MTD this year.
[4]
[5]
"Making Tax Digital will make it easier for sole traders and landlords to get their tax right by providing a more real-time overview of their finances, freeing up their time to focus on growing their business," an HMRC spokesperson told The Register .
The spokesperson added that HMRC ran marketing and information campaigns about the changes, and around three-quarters of this year's group have agents such as accountants who have very high awareness of the requirements.
[6]HMRC hands £473M Fujitsu migration deal to AWS after competition melts away
[7]UK tax collector plans £2B tech binge as legacy systems refuse to die
[8]UK Digital Services Tax raises £800M from global tech giants
[9]UK tax collector falls short on digital efficiency, watchdog says
In April 2027, the government will lower the MTD boundary to £30,000, pulling in 970,000 more sole traders and landlords, and then to £20,000 in April 2028, adding a further 975,000.
Those affected have to use [10]HMRC-approved software , with some free options but many paid-for, rather than the free online system run by the tax collector through the GOV.UK website.
[11]
HMRC previously estimated the change would [12]cost people about £350 to adopt and then £115 annually.
But [13]why April 6 ? In the medieval era, the English New Year started on March 25, also known as Lady Day to mark the Annunciation of Our Lady. People used Lady Day and the other quarter days of Midsummer, Michaelmas, and Christmas to settle accounts such as rents.
In 1752, England dropped 11 days from September to catch up with Pope Gregory XIII's calendar changes, which were adopted by most of Europe in 1582. To avoid being short-changed by the shorter year, the Treasury pushed the start of the tax year back to April 5, with a further day added in 1800.
[14]
Now, through MTD, HMRC is arguably reintroducing the custom of quarter days. ®
Get our [15]Tech Resources
[1] https://www.theregister.com/2026/02/20/making_tax_digital_exemptions/
[2] https://www.gov.uk/guidance/penalties-for-making-tax-digital-for-income-tax
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/publicsector&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2adjKQlngKcQoSPT2cPHSXAAAAJU&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/publicsector&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44adjKQlngKcQoSPT2cPHSXAAAAJU&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/publicsector&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33adjKQlngKcQoSPT2cPHSXAAAAJU&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[6] https://www.theregister.com/2026/03/25/hmrc_fujitsu_contract_aws/
[7] https://www.theregister.com/2026/01/28/hmrc_tech_pipeline/
[8] https://www.theregister.com/2025/11/28/uk_digital_services_tax/
[9] https://www.theregister.com/2025/11/07/uk_tax_collector_falls_short/
[10] https://www.gov.uk/guidance/choose-the-right-software-for-making-tax-digital-for-income-tax
[11] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/publicsector&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44adjKQlngKcQoSPT2cPHSXAAAAJU&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[12] https://www.gov.uk/government/publications/extension-of-making-tax-digital-for-income-tax-self-assessment-to-sole-traders-and-landlords/making-tax-digital-for-income-tax-self-assessment-for-sole-traders-and-landlords
[13] https://theconversation.com/why-the-uk-tax-year-begins-on-april-6-its-a-very-strange-tale-57247
[14] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/publicsector&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33adjKQlngKcQoSPT2cPHSXAAAAJU&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[15] https://whitepapers.theregister.com/
MTD = Making tax difficult
mark l 2
"Making Tax Digital will make it easier for sole traders and landlords to get their tax right by providing a more real-time overview of their finances, freeing up their time to focus on growing their business,"
Yes because making business owners have more red tape and paperwork to do and having to spend money on tax software they didn't previously require, always frees up time to focus on their business!
Re: MTD = Making tax difficult
Like a badger
Fundamentally MTD has the admitted primary intention of increasing the tax take from smaller businesses. Why expect Amazon, Microsoft or Facebook to pay their share when you can hound small companies and unincorporated traders? From HMRC's view, small businesses are all serial tax dodgers, and more frequent digital reporting will make tax avoidance and evasion far more difficult.
Part of the Labour party's core strategy of Britain taxing its way to prosperity, although to be fair, the Tories were doing the same, and were the initiators of MTD.
In my experience it's good to have April as the end of the tax year, although UK companies can choose any dates for their accounting years. When I worked for a US company in the UK our tax year ended on 31 Dec which meant a crap time for a whole bunch of people. Account managers, project managers, anyone in finance and even engineers if they were needed to finish something to claim a delivery. It often felt malicious with the yanks seeming to take the view that if they had to ruin their Christmas then so must we. A couple of colleagues had holidays cancelled at the last minute in order to come to the office between Christmsa and NY to chase cash payments from their customers even though everyone knew that the customers closed down over Christmas.