Despite becoming mandatory for sole traders, landlords and self-employed individuals with qualifying incomes over £50,000 from 6 April 2026, 65 per cent have still not registered for Making Tax Digital (MTD) for Income Tax.
Speaking at Accountex London 2026, HMRC is starting to make the case for why this lack of registration may be happening and what it could mean going forward.
With mass non-compliance appearing to be a greater risk, it is worth understanding what might happen if you neglect your MTD obligations.
Why is Making Tax Digital uptake still so low?
To upend the way that taxes are filed in such a generational fashion, there needs to be the right motivating factors driving the change.
For many affected, HMRC may not have succeeded in putting forward a convincing enough case for why making the switch to MTD will be beneficial in the long run.
The recent announcements at Accountex seek to rectify this by taking away some of the fears that could be causing resistance to the new system.
Advocating for a reconsideration of how MTD is framed, HMRC has highlighted that the quarterly updates should not be viewed as additional filings.
Instead, they are to be seen as checkpoints wherein data is logged in that moment and can be amended or corrected later on without issue or penalty.
It is clear from this that HMRC want to reposition MTD as being something inherently beneficial for those affected without it being too much of an administrative challenge.
However, the value of MTD has not been well understood by many since its announcement and the conflicting information surrounding its implementation may do little to change things.
Can I be casual about Making Tax Digital quarterly updates?
One thing will be fully revealed throughout 2026, but the current indication is that value alone is not enough to get people MTD compliant.
A fear of being penalised is likely to drive compliance and adoption, so 2027 may see a greater uptick in this once the fines begin taking effect.
The new assertion that the quarterly updates can be treated casually may also complicate matters once penalties do take effect.
Penalty points are gained from missing a quarterly update deadline, but seemingly no negative action is taken for submitting incomplete or erroneous data.
This could see a spike in box-ticking exercises, where those affected and some less scrupulous accountants do the bare minimum to dodge a fine without thinking about the long-term impact.
Such an approach will make the actual annual tax submission more challenging, as it will be built on the back of poorly maintained data that will then also need to be addressed and corrected.
Why should I register for Making Tax Digital?
You may feel that the value of MTD has not been expressed and might be unconvinced of this casual angle that is currently being suggested.
What remains is that MTD has a strong logic at its core and our expert team can help you find it.
MTD is about taking control of your finances, using the quarterly updates to know exactly where you stand throughout the year so that the annual submission is less stressful.
Using digital records means not having to rummage through boxes or filing cabinets, allowing you to have all that you need to make the decisions that really matter.
You can brace for quiet periods or invest more in growth if you understand your numbers.
All of this is possible, but only if you can become confident with MTD.
We understand the major upheaval these changes might bring about for you.
Whether you have been handling your finances for years or have only just stepped out of part-time or full-time work, MTD can feel intimidating.
Our professionals will review your systems so that you know what records you should be keeping and how to make your quarterly updates both timely and useful.
We can also aid you in getting set up with MTD-compliant software that suits your needs and budget.
Non-compliance hurts you with both penalties and inefficiencies, so let us take that stress from you.
The first quarterly update deadline is 7 August and we aim to get you ready long before then.
Get in touch to become Making Tax Digital ready before the first quarterly update deadline.
