Making Tax Digital for Income Tax has been live since 6 April 2026, and the first quarterly update deadline (7 August) has now passed. The trouble is, a lot of people still haven't signed up.
HMRC's own figures tell the story. Around 864,000 sole traders and landlords were required to join based on their 2024/25 income. As of 17 July, 429,000 of them still hadn't registered. By this week, more than 500,000 had signed up, which still leaves a substantial number who haven't.
What happens if you're one of them?
HMRC has confirmed that anyone who misses the deadline without signing up will be contacted by post with a reminder letter. So if you've had a letter land recently referencing MTD, this is likely why.
The good news, and the catch
There are no financial penalties for missing the first quarterly update, as HMRC is giving everyone a penalty free run in year one. But that soft landing only covers late filing once you're registered. Signing up itself is not optional, it's a legal requirement if your qualifying income was over £50,000 in 2024/25. Ignoring the letter won't make the obligation go away, it'll just mean playing catch up later with quarters piling on top of each other.
What to do if you haven't signed up yet
- Check whether you're in scope: it's based on gross income from self-employment and property combined, not profit, and it's based on your 2024/25 tax return
- Register through HMRC's online service, or ask us to do it for you if we're your appointed agent
- Once registered, you'll need to catch up on any quarterly updates you've missed, starting with the earliest one first
If you've had a letter from HMRC about this, or you're simply not sure whether you're affected, please get in touch with your Client Manager. We'd rather help you get sorted now than have you scrambling through a backlog of updates in a few months.